Whether the Council was justified under sections 30, 36 and 37 of the FOI Act in refusing access to part of a copy of the Part V (social housing) agreement for Belarmine Hall
31 January 2019
On 12 July 2018 the applicant made a request for access to a copy of the final Part V (social housing) agreement for Belarmine Hall, Stepaside acquired in 2008. She identified Castlethorn Construction (the Company) as the developer in that project. The Council failed to make a decision within the time allowed and so the applicant sought an internal review. An internal review decision was made by the Council on 26 September 2018. In it, the Council refused the applicant's request on the basis of section 30(1)(c) of the FOI Act. The applicant subsequently sought a review of that decision by this Office. During the course of the review, this Office also contacted the Company and offered an opportunity for it to make any submissions that it considered relevant.
I have decided to conclude this review by way of a formal, binding decision. In conducting the review, I have had regard to the correspondence between the Council and the applicant as described above. I have also had regard to the correspondence between this Office and the Council, the applicant and the Company on the matter as well as to the contents of the record at issue.
Scope of the Review
The Council identified one record that came within the scope of this review and that is the Part V agreement dated 19 September 2007 between the Council and the Company. Initially, access was refused in full to this record; however, during the course of the review, the Council agreed to release a redacted version. Financial information and unit numbers were redacted from the record. The Council claimed that sections 30(1)(c) and 36(1)(b) and (c) apply to the financial information and that section 37(1) applies to the unit numbers.
This review is therefore concerned with whether or not the Council was justified in refusing access to financial information and unit numbers on the basis of sections 30, 36 and 37 of the FOI Act.
I first wish to note that the manner in which the Council approached this review was very unsatisfactory. I served a statutory notice under section 23 of the Act on the head of the Council requiring a statement of reasons for the refusal to be furnished to the Commissioner and to the applicant as the Council failed to comply with the requirements of section 13 of the FOI Act. While the Council's response acknowledged its shortcomings and promised further training for decision makers and other improvements, it appeared to have no real understanding of the requirement to carry out a public interest balancing test and provide the applicant with particulars of any matter relating to the public interest taken into consideration in a refusal of an FOI request. The Council's later submissions in response to an invitation by the Investigator to address particular issues gave more details of its positions. However, the applicant was entitled to a proper decision in the first instance.
It should be noted that section 22(12)(b) of the FOI Act provides that a decision to refuse to grant an FOI request shall be presumed not to have been justified unless the head of the relevant public body shows to my satisfaction that its decision was justified. This places the onus of satisfying me that the decision was justified on the Council.
Analysis and Findings
The Council redacted all financial information from the record, including purchase price and VAT. It said that it did so on the basis of sections 30(1)(c) and 36(1)(b) and (c) of the FOI Act. The Company also relied on section 36 in submissions to this Office and so I will address that exemption in the first instance.
Section 36 - commercially sensitive information
Section 36(1) provides a mandatory exemption for commercially sensitive information. It applies to a record containing:
(b) financial, commercial, scientific, or technical or other information the disclosure of which 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, or
(c) information the disclosure of which could prejudice the conduct or outcome of negotiations of that person.
Section 36(2) provides for various exceptions to section 36(1). Section 36(3) provides that Section 36(1) is subject to a public interest balancing test.
I am satisfied that none of the circumstances set out at section 36(2) apply in this case.
Section 36(1)(b) is a mandatory exemption that 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". The Commissioner 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, the Commissioner 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  IEHC 375 (the Westwood case), 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. As mentioned above, the standard of proof required in the second part of section 36(1)(b) is relatively low, in the sense that the test is not whether prejudice is certain to materialise but whether it could do so.
Both the Council and the Company argued that the Company was not an FOI body and that their commercial interests should be safeguarded in any dealings with the Council. The Council argued that the Company should be able to conduct commercial transactions with the Council without fear of prejudicing their competitive position in business transactions. The Company stated that it was strongly of the view that the financial information was commercially sensitive under section 36(1) of the FOI Act and that it expected its commercial interests would and should be safeguarded in any dealing with the Council without fear of possibly suffering commercially as a result.
I am not satisfied that either the Council or the Company have identified a harm that could reasonably be expected to result in material loss or gain. Both parties stated only that the information was commercially sensitive and should be protected. The Council seemed to be of the view that unless the Company consented to the release of parts of the record, it was exempt. This, of course, cannot be the case. Adopting the reasoning set out in the Westwood case, I find that the decision to refuse access on the basis of section 36(1)(b) has not been justified and, consequently, I find that it does not apply.
Under section 36(1)(c), access to a record must be refused where disclosure of information contained in the record 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 this exemption is relatively low. 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.
Similar to section 36(1)(b), neither the Council nor the Company identified any contractual or other negotiations that are in train or reasonably foreseen which might be affected by the disclosure of this financial information. Even if I were to take it that any future Part V negotiations might be relevant here, neither party identified how such negotiations could be prejudiced by release of financial information dating from September 2007. I am therefore not satisfied that any prejudice has been identified and, consequently, find that the decision to rely on section 36(1)(c) has not been justified. I find that this section does not apply.
As I have found that neither section 36(1)(b) or (c) applies to the information, it is not necessary for me to go on to consider the public interest test set out at section 36(3).
Section 30 - functions and negotiations of FOI bodies
Section 30(1)(c) provides that a head may refuse to grant an FOI request if access to the record concerned could, in the opinion of the head, reasonably be expected to disclose positions taken, or to be taken, or plans, procedures, criteria or instructions used or followed, or to be used or followed, for the purpose of any negotiations carried on or being, or to be carried on by or on behalf of the Government or an FOI Body. The exemption does not contain a harm test but is subject to a 'public interest override' i.e. even where the requirements of subsection (1) have been met, the exemption does not apply where the public interest would, on balance, be better served by granting access than by refusing to grant the request. Any potential level of harm that may result from release would be relevant to the public interest considerations in section 30(2).
An FOI body relying on section 30(1)(c) should identify the relevant negotiations at issue. Relevant factors in considering whether there is a negotiation include whether the FOI body was trying to reach some compromise or some mutual agreement. An FOI body relying on this exemption must show to the Commissioner that release of the record could reasonably be expected to disclose positions taken (or to be taken), etc., for the purpose of any negotiations.
The Council submitted that release of the financial information in the record would disclose the position taken when negotiating this amount with the Company. I am not satisfied that release of the outcome of a negotiation necessarily discloses a position taken by the Council during such negotiations. However, even if I were so satisfied, this section is subject to a public interest balancing test.
The Council argued that the public interest is satisfied because all transactions are subject to audit by the Local Government Audit Service, which, it stated, provides independent scrutiny thereby ensuring high standards of financial stewardship and public accountability. It stated that transactions are fully open to scrutiny by the Local Government Audit Service. The Council did not identify any factors in favour of release in the public interest.
However, the FOI Act itself recognises a public interest in ensuring the openness and accountability of public bodies, regarding how they conduct their business. Indeed, 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. While an existing level of oversight might be a contributory factor in some cases towards satisfying this public interest, the Council has not identified any specific harm that would result from release in this case. Factors weighing against release of a record might include disclosure of positions taken for the purposes of negotiations which could reasonably be expected to prejudice current or future negotiations or cause some other harm.
I am not satisfied that the Council has identified a harm in this case that would outweigh the public interest in ensuring the openness and accountability of the Council regarding its financial affairs and the considerable expenditure of public monies. I am also mindful that the information in this case dates from September 2007 and so would find it difficult to accept in any case that release of this information could significantly impact any current or future negotiations, even if the Council had specifically identified any. I find that the public interest weighs in favour of releasing the financial information in the record.
Whether unit numbers and financial information are exempt as personal information
Section 37 - personal information
Section 37(1) of the FOI Act, subject to other provisions of section 37, provides for the mandatory refusal of a request if access to the record concerned would involve the disclosure of personal information relating to an individual or individuals other than the requester. 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 details fourteen specific categories of information that is personal information, without prejudice to the generality of the foregoing definition, including "(xii) the name of the individual where it appears with other personal information relating to the individual or where disclosure of the name would, or would be likely to, establish that any personal information held by the public body concerned relates to the individual". The Council argued that release of the unit numbers could reasonably be expected to lead to the identification of social housing units in a private development.
Having regard to the definition of personal information as set out above, I am satisfied that the unit numbers could easily be linked to the names of the occupants of those units and thus disclose the personal information of those individuals. I find, therefore, that section 37(1) applies to the unit numbers.
The Council also argued that release of financial information could lead to the identification of social housing tenants. It stated that the Council does not pay the open market rate for units acquired under Part V and so an examination of the Property Price Register would highlight the prices paid for housing units sold within any development. It argued that release of the monetary sum contained in any Part V Agreement could facilitate the identification of the particular units acquired by the Council, due to the difference in price paid on the open market by private purchasers and the price paid by the Council for units within the same development. The Council acknowledged that the Property Price Register does not date back to 2007, the date of this agreement, but still argued that release of such information could reasonably be expected to result in the disclosure of personal information. I disagree. I can not see how release of the financial information from this record could reasonably cause the result envisaged by the Council. This review is concerned solely with one record, the Part V agreement dated 19 September 2007. The Property Price Register relates to residential properties purchased in Ireland since 1 January 2010. Therefore, the comparison identified by the Council between the price paid by private purchasers and the price paid by the Council cannot be found on the register and therefore cannot give rise to the identification of those units. I find that section 37(1) does not apply to the financial information in the record and I direct the Council to release that part of the record.
Having found that section 37(1) applies to the unit numbers, I must go on to consider if any of the additional elements of section 37 serve to disapply that exemption.
Section 37(2) of the FOI Act sets out certain circumstances in which section 37(1) does not apply. I am satisfied that none of those circumstances arise in this case. Section 37(5) of the FOI Act provides that a request that would fall to be refused under section 37(1) may still be granted where, on balance, (a) the public interest that the request should be granted outweighs the right to privacy of the individual to whom the information relates, or (b) the grant of the information would be to the benefit of the person to whom the information relates.
I am satisfied that the release of the information at issue would not be to the benefit of the individuals concerned and that section 37(5)(b) does not apply. In relation to paragraph (a), I must consider whether the public interest in granting the request outweighs, on balance, the public interest in protecting the right of privacy of the individuals to whom the information relates.
The FOI Act acknowledges that there is a public interest in promoting the openness and accountability of public bodies in the manner in which they perform their functions. 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.
Arguably, the public interest in this case is largely satisfied by the release of the rest of this record. Releasing the unit numbers would contribute only minimally to enhancing any further transparency. 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.
Having carried out a review under section 22(2) of the Act, I hereby vary the decision of the Council. I uphold its decision to refuse access to the unit numbers under section 37 of the FOI and I direct release of the balance of the record (the financial information) on the basis that the Council has not justified its claim that sections 30 and 36 apply.
For the sake of clarity, I specify that, subject to sections 24 and 26 of the FOI Act, the financial information is to be released to the applicant within 5 working days of the expiration of the 4 week period available to the Council 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 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.