Case number: OIC-55467-Q3F3F5

Whether the Council was justified in granting partial access to agreements made with a developer for the purposes of compliance with Part V of the Planning and Development Act 2000 (social housing requirements) in relation to certain planning applications and whether further records covered by the request exist


31 October 2019


Background

 

Part V of the Planning and Development Act 2000 (Part V) provides for social and affordable housing obligations relating to certain residential developments. In a request dated 31 May 2019, the applicant sought access to the Part V agreement between the Council and a development company (the request referred to an individual as owner of the company), including how it was to be discharged and the timeline for discharging it, in relation to six specific planning applications. The Council’s decision of 1 July 2019 covered one agreement, dating from 2018, which it released in part. It relied on sections 36(1)(b) (commercially sensitive information), 36(1)(c) (information prejudicial to negotiations) and 37(1) (personal information) of the FOI Act in relation to the withheld parts. The applicant sought an internal review on 8 July 2019, in which she also questioned the number of agreements considered by the Council. On 29 July 2019, the Council affirmed its decision. It also provided the applicant with certain background information. On 9 August 2019, the applicant applied to this Office for a review of the Council’s decision. During the review, the Council identified another agreement dating from 2008 as covered by the request. It granted partial access to it and relied again on sections 36(1)(b), 36(1)(c) and 37(1) in relation to the withheld parts.

I have now completed my review in accordance with section 22(2) of the FOI Act and I have decided to conclude it by way of a formal, binding decision. In carrying out my review, I have had regard to the above exchanges and correspondence between this Office, the Council, the developer and the applicant. I have also had regard to the contents of the records concerned and to the provisions of the FOI Act.

 

Scope of the Review

The scope of this review is confined to whether the Council’s decision to withhold parts of the records falling within the scope of the applicant’s request is justified under the FOI Act.

 

Findings

Whether further records exist – section 15(1)(a)

Section 15(1)(a) of the FOI Act provides that a request for access to a record may be refused where the record does not exist or where it cannot be found after all reasonable steps to ascertain its whereabouts have been taken. A review of an FOI body's refusal of records under this provision assesses whether or not it is justified in claiming that it has taken all reasonable steps to locate all records of relevance to a request or that the requested records do not exist. It is not normally the function of this Office to search for records.

The applicant’s application for internal review noted that while her request sought every agreement in relation to the planning application numbers she had cited, she had received only part of the most recent agreement. She also raised this issue in her application for review to this Office.

The Council’s internal review decision said that the 2018 agreement covers all five planning applications with the exception of one that has yet to be decided upon. The Investigator asked the Council to comment on the applicant’s assertions and to explain why no further agreements exist. As set out above, the Council then located a further agreement covered by the request. Its position is that no others exist.

The Council said that permission for new houses was granted further to only two of the planning applications cited by the applicant and that three others either sought the extension of the duration of a permission or concerned the completion and modification of the development. It said that as no permission was sought or granted in relation to new houses arising from these three applications, no agreements exist in relation to them. It reiterated that the sixth planning application has yet to be decided upon. The Investigator put these details to the applicant and invited her comments; no response was received.

I have no reason to dispute the Council’s position that it has located the only two agreements that exist in relation to the planning applications. I am satisfied that that section 15(1)(a) of the FOI Act applies.

The applicant also said that her request had referred to a particular individual as owner of the development company but that the 2018 agreement was signed by another individual. The Investigator told her that the Council’s position was that planning permissions are granted to the company and that there was nothing further for this Office to consider on this point. I agree with the Investigator’s view that it is not the Information Commissioner’s role to determine who is authorised on behalf of a company to sign official documents on its behalf.

 

Commercial sensitivity and information prejudicial to negotiations - sections 36(1)(b) and (c)

 

The Council relied on sections 36(1)(b) in relation to the agreed contract price and other information concerning related undertakings in the agreements.

Section 36(1)(b) must be applied to certain types of information whose disclosure could reasonably be expected to result in material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of the 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 which might be occasioned by its release.

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.

In the High Court case of Westwood Club v The Information Commissioner [2014] IEHC 375 Cross J. held that it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice their financial position. Furthermore, a general prediction without any supporting evidence is not sufficient to satisfy the requirement that access to the record could reasonably be expected to result in the outcome envisaged. In the Supreme Court case of Sheedy v the Information Commissioner ([2005] 2 I.L.R.M. 374, [2005] 2 IR 272, [2005] IESC 35) Kearns J stated that "[a] mere assertion of an expectation of [prejudice] could never constitute sufficient evidence in this regard”. 

Section 36(1)(c) must be applied to "information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates". The conduct and the outcome of negotiations are separate matters. The standard of proof required to meet this exemption 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 this exemption 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.

As I noted already, Part V imposes various social and affordable housing obligations on developers. Those obligations vary depending on whether planning permission was granted before 2015. It is my understanding that a local authority has discretion to decide what percentage of a development must be reserved for social housing but that this is subject to a cap of 10% of the development (20% prior to 2015). Compliance with Part V is through transfer of undeveloped land within the site, or build and transfer of housing units within the site, or transfer of units on other land within the functional area of the local authority, or grant of a lease of houses within the site or functional area, or a combination of these. The compensation paid for units procured by the local authority is calculated by reference to a formula to determine the “existing use value” of the lands and normal construction and development costs.

The Council’s original and internal review decisions said that details relating to the price agreed had been withheld under sections 36(1)(b) and (c). It recited the wording of these provisions but provided no explanation as to why they apply. The Investigator invited submissions from the Council on this and asked it to address any details that it might decide to withhold from any other agreements covered by the request. She also said that if the Council considered other provisions of the FOI Act to apply, it should explain how the requirements of the exemption(s) are met and address the public interest where relevant.

The Council’s submission said that the agreed contract price is commercially sensitive. It went on to recite the wording of section 36(1)(b) but did not explain why the provision applies to the contract price. It did not address the information concerning the related undertakings. I have no basis to find the withheld information to be exempt under either element of section 36(1)(b) on foot of the Council’s arguments.

The Council’s submission also said that disclosure of the agreed price could compromise its negotiations with other developers and its ability to negotiate good value for money whilst ensuring that public funding is spent properly. While this Office accepts that section 36(1)(c) can apply to information relating to an FOI body’s contractual or other negotiations, the Council did not explain why the outcomes it envisages could arise from release of the withheld pricing and related undertaking information in the circumstances of this case. Furthermore, the records do not contain any details of the negotiations conducted between the Council and the developer. I have no reason to find section 36(1)(c) to apply on the basis of the Council’s assertions. The Council did not claim that any other exemptions in the FOI Act apply.

The Investigator also invited and received submissions from the developer. She gave it the dates of the agreements and said that the withheld information comprised unit numbers, pricing information and information relating to particular undertakings.

The developer said that it does not know who the requester is and that this person cannot have any relationship to the record because it relates only to the Council and the company. It said that the withheld information is not available to the general public and that it was never notified that the information and details of its discussions with the Council would be made available to the general public.

The developer said that disclosure of its financial relationship with the Council would put its competitors at a distinct advantage if they became aware of it. It said that it cannot quantify the financial loss that it may suffer because it is unsure how its competitors might react when they become aware of the withheld information. However, it said that once its competitors know the price involved in the contract, they would be able to reduce their prices below the company’s, meaning that it will not be financially able to obtain further such contracts from the Council. The developer said that disclosure of the information concerned will place it at a disadvantage when trying to buy further land for development. It said that potential sellers of land will know exactly what it received from the Council and would be able to increase their sales price on the basis that the company would have sufficient resources to pay such a higher price. In this regard, it referred to negotiations that it said are ongoing between it and another party in relation to the acquisition of land, which it said could be affected. It said that parties who have purchased houses in the estate the subject of the agreements may feel aggrieved about the price they paid. Finally, the developer said that disclosure of the sales price would prohibit it from increasing the price of subsequent properties for sale in that estate or on other properties of a similar nature.

I will deal with the company’s more general arguments first. As the Investigator told the company at the outset, the motivation of a requester is not relevant for the purposes of this review. She also explained that no conditions are attached to the release of records under FOI and that it was therefore wise to take the view that release of information to a requester is the same as placing it in the public domain. It follows that I cannot have regard to the company’s comments on the requester’s identity and the fact that she has no “relationship” to the records.  Neither does this Office have any role in investigating whether the Council told the company that the agreement and other records could be disclosed to the public under FOI or otherwise. The FOI Act has applied to local authorities since 1998 and it is hard to accept that a company doing business with the Council would not have been aware of this. In any event, the FOI Act does not provide for a finding that records should be withheld on the basis of the developer’s contention that it did not know that such information could be released. I should also say that the requester did not seek access to records detailing the company’s discussions with the Council and such records are not part of this review. 

Even if private purchasers feel aggrieved at the prices they paid for their homes, I do not see how this is a basis for refusing access to part of the records under sections 36(1)(b) or (c). Neither is it clear why such disclosure would prohibit the company from increasing the sale price of further houses in the estate or elsewhere. It is reasonable to assume that private house buyers know that social housing units are provided at a lower price and also that house prices generally fluctuate over time.

I accept that competitors may wish to obtain details of, say, successful tender prices so that they can seek to amend their bids in future such competitions. However, the making of a Part V agreement between a developer and a local authority does not appear to me to be similar to a tender competition. I note the criteria for the provision of social and affordable housing and the payment of compensation. As I have already mentioned, the records do not set out how the total agreed contract price or the related undertakings were arrived at. It is not apparent to me in such circumstances, nor has the developer explained, how the disclosure of the withheld details could be of use to other developers when making agreements concerning the provision of social housing such that the developer in this case could suffer commercially.

I note that the developer’s arguments do not distinguish between the pricing information and the information concerning the related undertakings or, indeed, the contents of either agreement. I also note that the Council told this Office and the applicant that the 2008 agreement was not complied with. Given that the details withheld from that record are over 11 years old, it is difficult to see without any explanation from the Council or the developer why they may have particular relevance or commercial sensitivity today such that they may be exempt under sections 36(1)(b) or (c). Accordingly, I do not consider the pricing and related information that has been withheld from the 2008 agreement to be exempt under these provisions of the FOI Act. There is no need for me to consider these parts of this record further.

Insofar as the 2018 agreement is concerned and having considered the developer’s arguments, I have no basis to accept that disclosure of any of the withheld pricing and related information could reasonably be expected to result in a material financial loss or gain to the company. However, I note the relatively low standard of harm required for section 36(1)(b) to apply on the basis that disclosure “could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates". There is a similar relatively low standard of harm required for section 36(1)(c) to apply. Given the basis on which compensation is paid, it is not clear to me how knowledge of an agreed contract price in relation to the provision of social housing on a particular development could be of use to a seller of other development lands in general. In any event, it also strikes me that such sellers are likely to be aware that certain developments are required to include social housing for which the developer will be compensated and factor this into their sales price. That said, I am willing to accept that it is possible that sellers of other lands with whom the developer in this case is currently negotiating, if they become aware now of the specific details of the relatively recently agreed compensation and related information, could attempt to seek further money for the lands from the developer than might otherwise be the case. I find that sections 36(1)(b) and (c) apply to the pricing and related information that has been withheld from the 2018 agreement. I will now go on to consider whether that information should be released further to the various exceptions to section 36(1) of the FOI Act or in the public interest (section 36(3)).

 

The public interest

Section 36(2) provides for a number of exceptions to section 36(1), which I do not consider to be relevant in this case. Section 36(3) provides that a record to which section 36(1) applies may be granted if the public interest would, on balance, be better served by granting than refusing to grant the request.

On the matter of where the public interest lies, I have had regard to the comments of the Supreme Court in The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v The Information Commissioner[2011] 1 I.R. 729, [2011] IESC 26) (the Rotunda case). It is noted that a public interest ("a true public interest recognised by means of a well known and established policy, adopted by the Oireachtas, or by law") should be distinguished from a private interest. Although these comments were made in relation to another provision of the FOI Act, I consider them to be relevant to the consideration of public interest tests generally.

The applicant says that she needs access to the withheld information in order to understand whether the estate comes under the 20% or 10% cap. She also refers to challenging the matter.  I cannot take into account any private interests that the applicant has in obtaining access to the withheld parts of the 2018 agreement, including any wish she may have to take legal or other action. Neither has this Office any role in determining whether there is an appropriate level of social housing in her estate, or take such matters into account when considering the public interest.

The Council’s decisions did not address the public interest, which the Investigator noted when inviting its submissions. She also said that the Council should comment on the argument that there is a significant public interest in the release of information concerning the Council’s management of matters relating to social housing and the expenditure of public monies. She invited the company to do likewise.

Essentially, the Council’s submission said that the public interest in citizens being able to use their legal rights is outweighed by the public interest in protecting the developer’s commercially sensitive information. The company said that there is no public interest in disclosure of the withheld information.

The FOI Act recognises a public interest in promoting the openness and accountability of FOI bodies. In this regard, section 11(3) of the Act requires public bodies performing functions under the Act to have regard to, among other things, the need to achieve greater openness in their activities and the need to strengthen their accountability and to improve their decision making. I accept that this public interest has been served to a certain extent by the parts of the agreements released to date, as well as the information given by the Council to the applicant at internal review stage. However, disclosing the agreed contract price and related information from the 2018 agreement would give a further insight into the nature of the Council’s agreement with the company and would further promote openness and accountability regarding the Council’s management of social housing and public monies.

Such disclosure will also disclose information concerning the developer’s business affairs, however. In this regard, section 36(1)(b) reflects a public interest in the protection of records containing information that could prejudice a private company's competitive position in the conduct of its business. Similarly, section 36(1)(c) reflects a public interest in protecting the conduct and outcome of negotiations. This Office takes the view that the FOI Act was designed to increase openness and transparency in the way in which FOI bodies conduct their operations and, in general terms, it was not designed as a means by which the operations of private enterprises were to be opened up to scrutiny.

That said, it must be recognised that the weight of the public interests both for and against release varies depending on the circumstances relevant to a particular FOI request. Such considerations arise in, for instances, cases involving requests for records concerning successful and unsuccessful tenders. Generally speaking, there would be a strong public interest in granting access to parts of records that would enable the assessment of, for instance, whether terms of contracts awarded were fulfilled and whether value for public money was achieved. Details that would enable such analysis include descriptions of services to be given or goods to be delivered and total sums payable under the contracts. The public interest would not necessarily weigh in favour of disclosure of details such as margins, profitability, business models or other internal affairs of the successful tenderers. Also generally speaking, the public interest in favour of release is entitled to more weight when considering records relating to a successful tenderer than records relating to unsuccessful tenders.

While, as I have already said, the agreements in this case do not arise further to a tender competition, in my view the disclosure of the information relating to the developer’s 2018 agreement with the Council in this case is essential to enable scrutiny of the arrangements entered into by the Council. I consider that such release is required in order to serve the public interest in openness and accountability. Having given the matter careful consideration, in the particular circumstances of this case I find that, on balance, the public interest would be better served by releasing the financial and related information from the 2018 agreement. 

 

Personal information – section 37

 

The Council has granted access to the actual number of units the subject of the agreements. However, it has withheld various references to specific unit numbers under section 37(1) of the FOI Act on the basis that such details are personal information about the people living in the units. Section 37(1) of the FOI Act, subject to other provisions of section 37, requires the refusal of a request if access to the record concerned would involve the disclosure of personal information.

For the purposes of the Act, personal information is defined as information about an identifiable individual that (a) would, in the ordinary course of events, be known only to the individual or their family or friends or, (b) is held by a public body on the understanding that it would be treated by it as confidential. The Act also details fourteen specific categories of information that is personal information, without prejudice to the generality of the foregoing definition. These categories, including “(ii) information relating to the financial affairs of the individual” and “(x) information relating to the property of the individual (including the nature of the individual’s title to any property)”.

The Council said that the unit numbers comprise information relating to the property of an individual (including the nature of the individual’s title to any property). It seems to me that disclosure of the unit numbers would reveal that the individuals residing in the unit are availing of social housing assistance. I find that section 37(1) of the FOI Act applies to these parts of the records.

 

Section 37(5) - The Public Interest

 

Subsection (1) is subject to other provisions of section 37 (sections 37(2) and (5)). In my view, only section 37(5)(a) is of relevance in this case. That section provides that a request that would fall to be refused under section 37(1) may still be granted where, on balance, the public interest that the request should be granted outweighs the public interest that the right to privacy of the individual to whom the information relates should be upheld.

I have already set out what I may take into account in considering the public interest. As already outlined, there is a public interest in promoting the openness and accountability of the Council in this case. On the other hand, the FOI Act also recognises the public interest in the protection of the right to privacy both in the language of section 37 and the Long Title to the Act (which makes clear that the release of records under FOI must be consistent with the right to privacy). It is also worth noting that the right to privacy has a constitutional dimension, as one of the unenumerated personal rights under the Constitution. Privacy rights will therefore be set aside only where the public interest served by granting the request (and breaching those rights) is sufficiently strong to outweigh the public interest in protecting privacy.

It seems to me that the public interest in favour of release in this case will be largely satisfied by the release of the agreed contract prices and related information in addition to those parts of the agreements that the Council has already released and the information provided at internal review stage. I accept that it would be further served by releasing the unit numbers but only to a minimal extent. On the other hand, I consider that disclosure of personal information relating to the occupants of the relevant units would result in a significant breach of their rights to privacy. On balance, I do not believe that the public interest that the FOI request should be granted outweighs the public interest that the right to privacy of the third parties should be upheld.

 

Accordingly, I find that the Council was justified in withholding the unit numbers on the basis of section 37(1) of the FOI Act. 

 

 

Decision

 

Having carried out a review under section 22(2) of the FOI Act, I hereby vary the Council's decision.

 

I find that section 15(1)(a) of the FOI Act applies on the basis that I am satisfied that the Council has located the only two agreements covered by the request. I affirm the Council’s refusal of the unit numbers on the basis that section 37(1) of the FOI Act applies and that the public interest does not weigh in favour of their disclosure.

 

I find that sections 36(1)(b) and (c) do not apply to the remaining details withheld from the 2008 agreement. I find that sections 36(1)(b) and (c) apply to the remaining details withheld from the 2018 agreement but that the public interest weighs in favour of their release. I direct the Council to release these details.

 

Furthermore, I specify that, subject to sections 24 and 26 of the FOI Act, effect shall be given by the Council to my decision within five working days of the expiration of the 4 week period for the bringing of an appeal to the High Court from this decision as provided for at section 24(4) of the FOI Act.

 

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 requester 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.

 

 

 

 

 

 

 

 

Elizabeth Dolan
Senior Investigator