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Federal Court of Australia - Full Court |
Last Updated: 26 March 2008
FEDERAL COURT OF AUSTRALIA
Bell v Commonwealth Scientific and Industrial Research Organisation [2008] FCAFC 40
FREEDOM OF INFORMATION -- Access -- Whether CSIRO exempt from
operation of Freedom of Information Act 1982 (Cth) in respect of particular
documents -- Whether documents requested in respect of its commercial activities
-- (CTH) Freedom of Information Act 1982 ss 3(1), 3(2), 4(1), 7(2), 7(2AA),
7(3), 7(4), 11(1), 43A, Div 1 of Pt II of Schedule
2.
Freedom of Information Act 1982
(Cth), ss 3(1), 3(2), 4(1), 7(2), 7(2AA), 7(3), 7(4), 11(1), 43A, Div 1 of
Pt II of Schedule 2
Administrative Appeals Tribunal Act 1975 (Cth), s
44
Science and Industry Research Act 1949 (Cth), s
9
Australian Broadcasting
Corporation v The University of Technology, Sydney [2006] FCA 964; (2006) 154 FCR 209 at
[10] disapproved
Australian Postal Corporation v Johnston [2007] FCA 386; (2007) 94
ALD 586 cited
Colakovski v Australian Telecommunications Corporation
[1991] FCA 152; (1991) 100 ALR 111
cited
MALCOLM
BELL v COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH
ORGANISATION
VID 750 OF 2007
BRANSON, SUNDBERG AND KENNY
JJ
20 MARCH 2008
MELBOURNE
|
AND:
|
THE COURT ORDERS THAT:
1. The application be dismissed.
2. The applicant pay the respondent’s
costs.
Note: Settlement and entry of
orders is dealt with in Order 36 of the Federal Court Rules.
|
BETWEEN:
|
MALCOLM BELL
Applicant |
|
AND:
|
COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH
ORGANISATION
Respondent |
|
JUDGES:
|
BRANSON, SUNDBERG AND KENNY JJ
|
|
DATE:
|
20 MARCH 2008
|
|
PLACE:
|
MELBOURNE
|
REASONS FOR JUDGMENT
THE COURT
1 In July 2005, the applicant, Malcolm Bell, made a request under the Freedom of Information Act 1982 (Cth) (FOI Act) for access to certain documents held by the Commonwealth Scientific and Industrial Research Organisation (CSIRO). These documents were:
Copies of research proposals and/or grant applications, contracts, presentations, scientific documents and papers, publications, memoranda and/or licences dated on or after 1 January 1976 and on or before 27 November 1993 concerning wireless or LAN networks which contain the following key terms:
(Wireless or radio) and (network or hub) and (ofdm or orthogonal frequency division multiplexing or fdm or frequency division multiplexing or multicarrier or interleave).
In summary, Mr Bell sought access to
documents relating to the research and development of wireless and LAN networks.
2 The primary decision-maker refused Mr Bell’s request on the basis that the documents were exempt documents within the meaning of the FOI Act. An internal review affirmed this decision. Mr Bell applied to the Administrative Appeals Tribunal (Tribunal) for review of the decision to refuse his request. Save for part of one document, the Tribunal affirmed the decision on the basis that the CSIRO was exempt from the operation of the FOI Act in relation to the documents.
3 As applicant in this Court, Mr Bell appeals pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). Section 44(1) of the AAT Act provides that "[a] party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding".
4 The questions of law raised by the Further Amended Notice of Appeal are:
(1) Whether in applying s 7(3)(b) of the FOI Act the activities being carried out by an agency must be the same activities as may reasonably be expected in the foreseeable future to be carried out on a commercial basis in competition with a person other than government.
(2) Whether in applying s 7(3) of the FOI Act it is necessary to read
down that provision in light of the purposes and object
of the Act and
s 43A specifically so as to exclude from its scope research activities
conducted as a prelude to activities conducted
on a commercial basis.
(3) Whether having found as a fact that a profitable return on identified
activities was no more than a possibility it was open to
the Tribunal to
conclude that the activities may reasonably be expected in the foreseeable
future to be carried on by an agency on
a commercial basis.
(4) Whether the phrase "foreseeable future" in s 7(3)(b) means a time
as long as one can envisage given the current circumstances
and whether it is
qualified by the phrase "that may reasonably be expected".
(5) Whether "commercial activities" as defined by s 7(3) of the FOI
Act are activities being carried on by the CSIRO at the time
the documents are
received or brought into existence.
(6) Whether activities are carried on on a commercial basis in competition
with others for the purpose of s 7(3) of the FOI Act
if (in the sense of
"merely because") they are activities that are related to, engaged in or used
for commerce.
(7) Whether documents will be in respect of commercial activities if, and
only if, they satisfy s 7(4).
So far as question 2 is concerned, nothing was said in argument about the object of the FOI Act as distinct from its purposes.
5 As it happened, on the hearing of the appeal, the applicant, Mr Bell, did
not press the Court to answer the third and fourth question
set out above, and,
since little, if anything, was said in argument about the matters they raise, we
do not do so. Leaving aside
these two questions, both the applicant and the
respondent would have the Court answer all questions save question 6 in the
affirmative.
Whilst the applicant invited the Court to answer "no" to question
6, the CSIRO contended that this question could not be answered
in the form in
which it stood. This curious result might indicate that the applicant had
failed to frame an appropriate question
for the Court’s consideration. As
will become plain, however, the real area of contest between him and the CSIRO
was as to
whether the Tribunal itself had correctly understood the applicable
law.
Statutory framework
6 The object of the FOI Act, as stated in s 3(1), is "to extend as far as possible the right of the Australian community to access to information in the possession of the Government of the Commonwealth" by, amongst other things, "creating a general right of access to information in documentary form". The FOI Act further provides, in s 3(2), that:
It is the intention of the Parliament that the provisions of this Act shall be interpreted so as to further the object set out in subsection (1) and that any discretions conferred by this Act shall be exercised as far as possible so as to facilitate and promote, promptly and at the lowest reasonable cost, the disclosure of information.
7 Section 11(1) provides that, subject to the FOI Act, every person has a legally enforceable right to obtain access in accordance with the Act to:
(a) a document of an agency, other than an exempt document; or(b) an official document of a Minister, other than an exempt document.
The CSIRO is an "agency", being a "prescribed
authority": see s 4(1). The term "exempt document" is also defined in s 4(1),
with
the result that, under the FOI Act, the relevant right of access does not
extend to: (1) a document which, by virtue of Pt IV, is
an exempt document; (2)
a document in respect of which, by virtue of s 7, an agency is exempt from
the operation of the FOI
Act; or (3) an official document of a Minister that
contains some matter that does not relate to the affairs of an agency or a
Department
of State. This case concerns the effect of s 7 of the FOI Act.
8 Section 7 of the FOI Act exempts certain persons and bodies from the operation of the Act. Relevantly, s 7 provides:
(1) The bodies specified in Division 1 of Part I of Schedule 2, and a person holding and performing the duties of an office specified in that Division, are to be deemed not to be prescribed authorities for the purposes of this Act.
(1A) ...
(2) The persons, bodies and Departments specified in Part II of Schedule 2 are exempt from the operation of this Act in relation to the documents referred to in that Schedule in relation to them.
(2AA) A body corporate established by or under an Act specified in Part III of Schedule 2 is exempt from the operation of this Act in relation to documents in respect of the commercial activities of the body corporate.
(2A) ...
(3) In subsection (2AA) and Part II of Schedule 2, commercial activities means:
(a) activities carried on by an agency on a commercial basis in competition with persons other than governments or authorities of governments; or(b) activities, carried on by an agency, that may reasonably be expected in the foreseeable future to be carried on by the agency on a commercial basis in competition with persons other than governments or authorities of governments.
(4) In subsection (2AA) and Part II of Schedule 2, a reference to documents in respect of particular activities shall be read as a reference to documents received or brought into existence in the course of, or for the purposes of, the carrying on of those activities.
Division 1 of Part II of Schedule 2, headed "Agencies exempt in respect of particular documents", includes the following entry:
"Commonwealth Scientific and Industrial Research Organisation, in relation to documents in respect of its commercial activities"
The applicant’s case
concerns the construction and application of s 7(2AA), (3) and (4) of the FOI
Act.
The documents at issue
9 There are presently eight documents said to fall within the applicant’s request. In describing them, the Tribunal set out the following passages in an affidavit sworn by Dr D N Cooper, on behalf of the CSIRO, stating:
Document OneDocument number one comprises three unrelated documents, none of which, individually, meet the search criteria in the applicant’s request dated 27 July 2005. The first part of the document, comprising pages 1-5, is a report created on 14 June 1991 by Mr Diet Ostry, an employee of the respondent and is entitled ‘Description of a Media Access Protocol proposed at IEEE P802.11 meeting, May 1991’. This document deals with the Institute of Electrical and Electronic Engineers (‘IEEE’) meeting about medium access controller protocols. The report was generated for the PLANs project ...
Pages 6-7 of document 1, appear to be part of a path-loss calculation for a 43GHz radio for the Advanced Telecommunications Syndicate project. This project was a commercial project to develop a high-speed WLAN and WCAN (Wireless Customer Access) products that was funded by a syndicate involving Westpac, Rothschild and LM Ericsson.
Page 8 of document 1 appears to be part of a specification for an ultrasound transducer. This document was created by Dr Dave Carpenter and Mr Tony Sweetnam, employees of the respondent, and is an outline specification for an ultrasound transducer. The Ultrasonics Program was a commercial research program aimed at generating intellectual property outcomes for licensing. The program competed with commercial research laboratories such as Ausonics, Diasonics and Philips. Some of the outcomes were licensed to Philips and others.
Document Two
Document number two was created by Dr John O’Sullivan, an employee of the respondent, on 17 November 1991 and is entitled ‘Modulation for the WLAN – A Collection of Issues’. This report about modulation issues was generated by Dr O’Sullivan for the PLANs project ...
Document Three
Document number three was created on 3 July 1992 by Dr Terence Percival and was entitled ‘High Speed Modulation Options’. This report about modulation issues was generated by Dr Percival for the PLANs ... project ...
Document Four
Document number four is an Attachment 1 to a Contract Research Agreement between CSIRO and IBM Australia Pty Ltd created on 21 December 1992. The title of the document is ‘Very High Performance Wireless LAN – Proposal for Pre-design Phase’. This document is a commercial proposal to IBM to undertake a pre-design study for the development of a very high performance WLAN ...
Document Five
Document number five is a report dated 12 March 1993 entitled ‘Project Flying Fox – Preliminary Specification for a Very High Performance WLAN’. This document was created pursuant to CSIRO’s contract with IBM ... and is related to document numbers four, six, seven and eight.
Document Six
Document number six is a project plan created on 21 April 1993 in relation to a project between the respondent and IBM. This document was created pursuant to CSIRO’s contract with IBM ... and is related to document numbers four, five, seven and eight.
Document SevenDocument number seven is a document entitled ‘Proposal for a Very High Performance Wireless LAN – System Development’ created on 23 April 1993. This document was created pursuant to CSIRO’s contract with IBM ... and is related to document numbers four, five, six and eight.
Document Eight
Document number eight is a report created on 26 November 1993 concerning the contract research agreement between the respondent and IBM. This document was created pursuant to CSIRO’s contract with IBM ... and is related to document numbers four, five, six and seven.
This description is adequate when regard is had to the findings
of the Tribunal, which are discussed below.
The Tribunal’s
Decision
10 The Tribunal’s reasons for its decision are lengthy and disclose that it gave careful consideration to the issues before it. What follows is a statement in summary form of the Tribunal’s principal findings and definitive reasons.
11 Amongst other things, the Tribunal found that the appointment of Dr Cooper as Chief of the CSIRO’s Division of Radiophysics coincided with a requirement that the Division earn 35% of its budget from external sources. The Tribunal stated (at [7]-[8] of its reasons):
As a result of the requirement, the Division of Radiophysics had to seek commercial returns on the research services it provided and on any intellectual property it created. It did not charge for all research services that it provided and had certain mechanisms in place when it undertook work for small companies. Where it did charge, it adopted a price and royalty policy in line with industry norms.
Some of its research work was regarded as ‘in-house’ research work and not charged for. That work was funded out of appropriation moneys in the context of what the CSIRO described as its ‘Priorities Program’. That program provided funding for projects that would have significant applicability in the market place and that were ultimately intended to provide commercial returns, and so a profit, to CSIRO.
12 The Tribunal described the Program for Local Area Networks and Services (PLANs) in the following terms (at [9]):
The [PLANs] was conceived in or about September 1981 to exploit its expertise in microwave and millimetre wave design, propagation and digital signal processing. The CSIRO thought that there would be a need in the market for a fast roll-out wireless access for consumers and, in view of the growing need to ensure computers’ mobility, a wireless system to replace the conventional wired Local Area Networks (LANs). It commissioned a Californian market research company to report on the market potential for a wireless LAN and proceeded to address considerations relating to the market, competitive analysis, technology edge and time-to-market as well as potential competitive price points. The CSIRO wanted to be the market leader in the technology and to gain the market advantage that carried with it. It wanted to earn revenue by licensing the technology it developed.
13 According to the Tribunal, PLANs had two sub-projects, including the Wireless Local Area Networks (WLAN) Project. This sub-project:
... entailed the development of technologies for high-speed connectivity over tens of metres inside buildings. It is a wire-free technology enabling portable computers, or laptops, to communicate with data networks, including corporate data networks, and the Internet using radio waves instead of cables. (Reasons, [10])
The Tribunal found that, by about the end
of 1991, the CSIRO had developed core aspects of the WLAN invention, and that
the invention
was filed with the Australian Patent Office in November 1992.
14 The Tribunal continued:
Standards for WLANs were developed by the Institute of Electrical and Electronic Engineers (IEEE). The IEEE is a non-profit organisation whose members discuss the requirements of communication systems and debate the benefits of various solutions put forward by members. Once agreement is reached a standard is ratified and published. Manufacturers then build products designed to comply with the standard. In that way, communication systems are able to inter-operate.
In Europe, a group of firms conducted a project funded by the European Union (EU). The project, codenamed ‘Magic Wand’, led to the development of an international standard for the WLANs in 1999 and another in 2003. Those standards replicate the techniques invented by the CSIRO. Any firm making units complying with the standards must be licensed by the CSIRO as the patent owner.
(Reasons, [14]-[15])
15 The Tribunal also found that, in pursuit of the WLAN Project, the CSIRO entered into agreements with certain other organisations, such as Macquarie University, and that these agreements were known as the Devices and Systems Hardware, or DASH, agreements. The Tribunal recorded that:
Under those contracts, the CSIRO developed various aspects of the WLAN project. One such aspect was the development of the technology for the Medium Access Controller, which is a system for sharing a radio channel. Rights to that technology are co-owned by the CSIRO and Macquarie University. Another aspect was the design of a chip implementing the CSIRO’s patented modem technology. Rights to that design are also co-owned by the two entities. Under the DASH agreements, the CSIRO has exclusive rights to commercialise the co-owned technologies and the proceeds of that commercialisation are distributed between the two on a pro rata basis according to their contributions.(Reasons, [16])
16 The Tribunal found that, in the mid 1990s, the CSIRO decided to seed-fund a demonstrator project within Macquarie University, adding that:
The ‘invention’ of the internet in the mid 1990s with the consequent creation of a large potential market for the technology in the USA encouraged two professors from Macquarie University and Dr Percival, one of the WLAN inventors, to incorporate a company.
For reasons unconnected with its work regarding the technology, that company was incorporated in Delaware and known as Radiata Inc ... Later, Radiata Communications Pty Ltd (Radiata Communications) was incorporated in Australia in 1997 ...
In 1997, the CSIRO entered a licensing agreement with Radiata Communications regarding the use of co-owned technology developed under the DASH agreements ... Radiata Communications went on to be the first firm to demonstrate a WLAN system that was compliant with international standards developed as a result of the Magic Wand project.
(Reasons, [18], [19] [20])
17 When it turned to the FOI Act, the Tribunal began with construing s 7(2). In this regard, it stated:
Part II of Schedule 2 requires that there be a connection between the document to which access is sought and the CSIRO’s commercial activities. Once a sufficient connection is found so that the document can be said to be ‘in respect of its commercial activities’, the CSIRO will be exempt from the operation of the FOI Act in relation to that document.(Reasons, [62])
The Tribunal added (at [69]):
Relying only on the interpretation of the words of the FOI Act, it seems to me that the exemption provisions of Division 1 of Part II of Schedule 2 are intended to be confined to documents in respect of certain activities or functions or to documents that meet certain descriptions. They are not intended to apply to documents in relation to those documents ... In relation to the CSIRO it is intended to be limited to the documents in respect of its commercial activities. The exemption is not intended to apply to documents in relation to documents in respect of its commercial activities.
After looking at material extrinsic to the
FOI Act, the Tribunal said (at [74]):
The partial exemption of an agency from the operation of the FOI Act is given to protect disclosure of information contained in documents regarding certain functions where that protection would not necessarily be available by means of the exemption provisions of Part IV. When regard is had to the different formulations of the exemption in Part II of Schedule 2, it is clear that Parliament was careful to distinguish between those situations in which a particular person, body or Department is exempt in relation to a document having the requisite connection with the function or activity and those in which it is exempt only in relation to the function or exemption itself.
18 There was, according to the Tribunal, a difference between Bennett J’s analysis in Australian Broadcasting Corporation v The University of Technology, Sydney [2006] FCA 964; (2006) 154 FCR 209 (ABC) and Greenwood J’s approach in Australian Postal Corporation v Johnston [2007] FCA 386; (2007) 94 ALD 586 (Australia Post). The Tribunal considered that its preferred construction was consistent with Australia Post and not with ABC, although the differences in approach would not have led to different outcomes in the current case. In the event this latter conclusion was incorrect, the Tribunal went on at the end of its reasons to consider "the matter from both points of view".
19 In relation to s 7(4) of the FOI Act, the Tribunal stated (at [95]):
Given the expanded meaning of ‘commercial activities’ in s 7(3), the documents coming within the scope of s 7(4) are not limited to those that are received or brought into existence in the course of, or for the purposes of, activities being carried on in competition with persons other than governments or authorities of governments at the time they are received or brought into existence. They include those but extend to those that may reasonably be expected in the foreseeable future to be carried on by the agency on that basis.
20 Speaking of s 7(3)(a), the Tribunal noted the "difference between a purpose or a task, and so a function, and the doing of things to carry out that purpose or task, and so the activity", and that this difference was recognised in both the FOI Act and the Science and Industry Research Act 1949 (Cth) (S&IR Act), pursuant to which the CSIRO was created. The Tribunal rejected a submission, on Mr Bell’s behalf, that s 43A of the FOI Act and its application to the CSIRO supported the proposition that the CSIRO’s internal research activities were to be regarded as separate and distinct from its commercial activities. The Tribunal concluded (at [125], [126] and ([127]):
Reading the whole of s 7(3) ... it seems to me that I should have regard to all the activities in question both in isolation and in the context of all the activities of the agency. Those activities may constitute one or more of a series of activities that can themselves be regarded as being conducted on a commercial basis in competition with persons other than governments or authorities of governments. They may constitute a single activity which would not, taken on its own, be regarded as an activity conducted on a commercial basis in competition with others but which would, when taken in the context of the agency’s other activities, be seen as such an activity ...
Activities are conducted on a commercial basis in competition with others if they are activities that are related to, engaged in or used for commerce. Regard must be had both to the nature of the particular activities and their purpose. Profit making or the generation of income or return in some form can be expected as an ultimate goal of the agency that is engaged in the activities but may not be an immediate outcome of the particular activities under consideration ...
It is essential that the activities are those that are related to, engaged in or used for commerce in competition with other persons other than governments or authorities of government if they are to come within s 7(3)(a).
Contrasting s 7(3)(a) and (b), the Tribunal
determined that s 7(3)(a) did "not extend to those [commercial activities] that
may be
carried on ... in the future".
21 Referring to s 7(4), the Tribunal held that s 7(3)(a) and (b) referred to "the proper characterisation of the documents at the time that they were received or brought into existence". It followed, in the Tribunal’s view, that it was to have regard to "the evidence at the time the documents were received or brought into existence in the course of, or for the purposes of, carrying on the activities under consideration", as well as "to events as they turned out to the extent of shedding some light on the probability, when viewed from an earlier time, of the events’ occurring".
22 The Tribunal concluded that the documents in question were received or brought into existence between 1 January 1976 and 27 November 1993, being the period covered by the applicant’s initial request for access. The Tribunal was satisfied that "at least in the years from 1999 to 2003 and beyond, the CSIRO’s activities in relation to the WLAN project were carried on at a time when it might reasonably be expected in the near future, let alone in the foreseeable future, to be carried on in competition with others on a commercial basis" (at [154]). In the current case, however, the Tribunal was concerned with a preceding period between 1991 and 1993, being the period in which the documents in question were received or brought into existence. As to this it said (at [157], [159], [160], [161]):
In this case, I am satisfied that those in the CSIRO began their research with the long term aim of achieving a commercial advantage in the market place ... [T]hey conducted preliminary market research through a Californian market research company and its own analysis of the potential market. That sort of research is consistent with its stated aim of the CSIRO’s wanting to be the market leader in the technology, to gain the market advantage that carried with it and wanting to earn revenue by ... licensing the technology it developed.
...
Having regard to these matters, I am satisfied that, at the time each of the eight documents was received or came into existence, the CSIRO was not carrying on its activities on a commercial basis. Its activities were directed to a particular goal but, at that time, the possibility of their returning a profit or benefit for the CSIRO was just that: a possibility. That possibility was too remote to justify my concluding that the activities undertaken at the time were related to making a return, let alone a profit. Consequently, I am not satisfied that those activities related to, were used for or were intended for a commercial outcome at that stage. Therefore, for the purposes of s 7(3)(a) of the FOI Act, I am not satisfied that the CSIRO was carrying on commercial activities in so far as its work on the WLAN project was concerned.
It was, however, reasonably foreseeable at that time that the CSIRO would conduct them on a basis that would see a return to it from the general market place. That does not necessarily mean that it would in fact do so (as proved to be the case) but it was reasonably foreseeable in all the circumstances. Those circumstances included knowledge of the research that had been undertaken regarding the market place for a fast roll-out wireless access to ensure computers’ mobility and its potential as well as the CSIRO’s own assessment of its potential. The reasonableness of its putting faith in that research and its own assessment was to be underscored in the mid 1990s by then Vice President Gore’s announcement regarding the computer resources for schools and the consequent immediate growth in demand in the market place. I am satisfied that the CSIRO’s activities were commercial activities within the meaning of s 7(3)(b) of the FOI Act.
Having regard to the content of each of the eight documents, I am satisfied that each was either received or brought into existence both in the course of and for the purpose of the CSIRO’s commercial activities as described in s 7(3)(b). Apart from the second and third aspects of document 1, their subject matter is directly related to one or other of the activities that were directed to its completing the PLANs or WLAN projects and ultimately achieving a commercial outcome. The first part of Document One, for example, is directly related to the CSIRO’s participation in the development of the international standard. Document two and three are directed to modulation issues for the WLAN project ... The second and third aspects of document 1 are according to their description and to the evidence of Dr Cooper, which I accept, received or came into existence for the purposes of the CSIRO’s commercial activities other than the PLANs or WLAN projects. The CSIRO was clearly competing with non-government agencies in relation to those activities. I am satisfied that each of the eight documents comes within the terms of s 7(4).
Since they came within s 7(4), the documents were
documents described in Pt II of Schedule 2 in relation to the CSIRO and the
CSIRO
was an exempt agency in respect of them.
Questions 1, 5 and
6
23 We discuss questions 1, 5 and 6 together since they cover much the same ground.
24 The first part of the applicant’s argument focused on s 7(3) of the FOI Act. The applicant argued that the Tribunal:
(1) erred in applying s 7(3), by failing to consider whether the activities being carried out by the CSIRO when the documents were received or brought into existence between 14 June 1991 and 26 November 1993 were themselves activities that might reasonably be expected in the foreseeable future to be carried on by the CSIRO on a commercial basis, as opposed to activities that were merely precursors to such activities;
(2) should have found that the CSIRO was only exempt from the operation of the FOI Act in relation to documents that were themselves in respect of an activity then being conducted by the CSIRO, being a commercial activity as defined by s 7(3); and
(3) erred in applying s 7(3), by treating activities that are related to commerce as activities carried on on a commercial basis in competition with others for the purpose of s 7(3).
25 The applicant submitted that s 7(3) was limited to activities that were undertaken "as part of the commercial endeavour" of the agency. That is, on his submission, s 7(3)(b) did not extend to non-commercial activities that were merely "related to the commercial outcome in the sense that they occurred as part of a continuum of activities ... intended to achieve a commercial outcome". The applicant contended, and the respondent denied, that the Tribunal had adopted this "continuum of activities" approach, with the result that it considered that "any activity that was ‘related to, engaged in or used for commerce’ fell within the scope" of the expression "commercial activities" for the purpose of s 7(3). That is, according to the applicant, the Tribunal wrongly extended "the scope of commercial activities to include any activity connected with commerce" and failed "to chart the ambit of the relevant activities". The respondent replied that the Tribunal had not misapplied s 7(3) in the manner the applicant alleged and, in particular, had not treated activities that were merely related to commerce as commercial activities within s 7(3)(b) of the FOI Act.
26 In many ways, the task of construing s 7(3) is straightforward and, as will be seen, we do not think the Tribunal erred in its application of it. Section 7(3) defines the expression "commercial activities" in Pt II of Schedule 2 and in s 7(2AA), although the latter provision is not presently relevant. Whilst both limbs of s 7 refer, as the applicant says, to activities being carried on, relevantly, at the time a document is received or created by a relevant agency, the two limbs of s 7 call for different inquiries in point of perspective. Section 7(3)(a) invites consideration of the existing commercial quality of the agency’s activities at the time the document is received or brought into existence: that is, whether at the time the document is received or brought into existence the agency is carrying on activities "on a commercial basis in competition with persons other than governments or authorities of governments". This will be a relevant inquiry if it can properly be said that a document to which access is sought is a document "in respect of" these activities: see Pt II, Schedule 2. Section 7(3)(b), on the other hand, invites consideration of the prospective commercial quality of the agency’s activities at the time the document is received or created: that is, whether at this time the agency is carrying on activities "that may reasonably be expected in the foreseeable future" to be carried on by the agency on "a commercial basis in competition" with non-government persons or organisations. This will also be a relevant inquiry if it can properly be said that a document to which access is sought is a document "in respect of" these activities: see Pt II, Schedule 2. Section 7(4) clarifies what Pt II of Schedule 2 (and s 7(2AA)) of the FOI Act intend by the expression "documents in respect of particular [here, commercial] activities", by stipulating that the expression be construed to cover documents "received or brought into existence in the course of, or for the purposes of, the carrying on" of those activities. As we have seen, the CSIRO is exempt in respect of documents falling within this description: see ss 11, 4(1), 7(2), (3) & (4) and Div 1 of Pt II of Schedule 2.
27 We reject the applicant’s characterisation of the Tribunal’s analysis for the following reasons. First, the Tribunal correctly stated the effect of s 7(3) and (4) of the FOI Act: see reasons at [132]-[133]. Secondly, in conformity with this, the Tribunal proceeded on the basis that the activities, in the course of which and for the purposes of which the documents were received or created between 1991 and 1993, consisted of research into WLAN technology and the development of that technology for commercial return. This appears from the Tribunal’s reasons, particularly at [161] and [157]-[159] (see [22] above), and from its description of the factual background: see, for example, [7]-[16] (see [11] above and following). The Tribunal made a finding of fact (at [160]; see [22] above) that it was reasonably foreseeable at that time that the CSIRO would conduct these activities on a basis that would see a return from the market place. The Tribunal also made the basis for this finding clear (namely, the circumstances that included knowledge of the research undertaken on the market place for fast roll-out wireless access and its potential). Further, the Tribunal found (at [161]; see [22] above) that, save for the second and third parts of document one, the subject matter of the documents was "directly related to one or other of the activities that were directed to its completing the PLANs or WLAN projects and ultimately achieving a commercial outcome". That is, the Tribunal found that the documents were received or brought into existence in the course of and for the purposes of the carrying on of CSIRO’s research into WLAN technology and the development of that technology for commercial returns (at least by implication, in competition with non-government bodies); and that it was reasonably foreseeable when the documents were received or brought into existence that the CSIRO would conduct that research and development on a commercial basis.
28 The applicant’s criticism of the Tribunal’s reasoning is misconceived. Whilst the Tribunal said at [126] (see [20] above) that activities are conducted on a commercial basis if they are related to, engaged in or used for commerce, the Tribunal also emphasised the importance of the whole of the circumstances including the commercial goal (profit making or the generation of income or return) in determining whether particular activities are sufficiently related to commerce to be characterised as commercial activities.
29 The applicant also relied on s 9(1) of the S&IR Act, which provides that the CSIRO is to carry out scientific research for the purpose, amongst other things, of assisting Australian industry, and to encourage or facilitate the application or utilisation of the results of such research. As the respondent noted, these can be regarded as complementary functions or activities. The applicant’s contention that they are necessarily distinct for the purposes of s 7 of the FOI Act lacks any genuine foundation. In any case, as the respondent observed, s 7 of the FOI Act does not require the characterisation of activities in accordance with s 9(1) of the S&IR Act. As we have seen, s 7(3) requires a different inquiry: see [26] above. The Tribunal made the correct inquiry and, in consequence, relevant findings of fact. We can discern no error in its so doing.
30 It follows from the foregoing that, whilst we would answer the first and
fifth question in the affirmative, we do not detect any
error in the
Tribunal’s analysis. Further, we agree with the respondent that, strictly
speaking, the sixth question does not
arise from the Tribunal’s reasons,
since the Tribunal did not make the error that the question
assumes.
Question 2
31 The applicant contended that the Tribunal should have read s 7(3) having regard to the objects of the FOI Act and s 43A, and as a result gave an unduly broad operation to the subsection so as to include activities that are related to commercial activities.
32 The applicant’s submissions asserted only that s 43A "provides some context to the approach to the construction of" Pt II of Schedule 2. The section provides:
(1) A document is an exempt document if:
(a) it contains information relating to research that is being, or is to be, undertaken by an officer of an agency specified in Schedule 4; and(b) disclosure of the information before the completion of the research would be likely unreasonably to expose the agency or officer to disadvantage.
(2) This section does not apply to a document that, so far as it contains information relating to research, only contains information relating to research that has been completed.
The CSIRO is an agency specified in Schedule 4.
33 The Tribunal rejected the applicant’s contention that s 43A supports the view that the CSIRO’s internal research activities, which are not conducted for a particular client, are not carried out on a commercial basis. After referring to the structure of Pt IV of the FOI Act, which exempts specified types of documents from access, the Tribunal said (at [114]):
Section 7(3) is enacted for the purpose of interpreting Part II of Schedule 2. Part II of Schedule 2 must, in turn, be read with s 7(2) exempting particular agencies from the operation of the FOI Act in relation to documents referred to in the Schedule in relation to them. That must mean that Parliament intended that a request for access to a document referred to in Schedule 2 may be refused whether or not it would be exempt under a provision of Part IV. In view of that, it would be inappropriate to read down the provisions of s 7(3) in light of any of the exemption provisions in Part IV.
34 In our view the applicant derives no assistance from s 43A for his preferred construction of s 7(3). The regime in s 7(2), the Schedule and the definition in s 7(3) is focussed and distinct. So is that in s 43A. They deal with different topics, though the CSIRO features in both. The first relates to documents in respect of which an agency is exempt from the operation of the FOI Act because they are documents in respect of its commercial activities as defined in s 7(3). The second relates to documents containing information relating to research that has not been completed. Nothing has been pointed to that requires the plain words governing one regime to be modified in light of those of the other.
35 The applicant’s submissions do not disclose what he seeks to derive from the objects of the FOI Act. In any event they do not assist him. The introductory words of s 3 are:
The object of this Act is to extend as far as possible the right of the Australian community to access to information in the possession of the Government of the Commonwealth by ....
Paragraph (b) of s 3 speaks of
creating a general right of access to information in documentary form in the possession of Ministers, departments and public authorities, limited only by exceptions and exemptions necessary for the protection of essential public interests and private and business affairs of persons in respect of whom information is collected and held by departments and public authorities.
The emphases are ours.
36 As s 3 as a whole makes clear, the FOI Act does not accord precedence to access over exemption or vice versa. The right of access is subject to the exceptions referred to in s 3(b). That is why the introductory words use the phrase "as far as possible" and par (b) speaks of a "general right of access". Accordingly the access and exemption provisions must be construed according to their terms. See Colakovski v Australian Telecommunications Corporation [1991] FCA 152; (1991) 100 ALR 111 at 121. In the absence of submissions as to the relevance of the objects in the interpretation of the FOI Act, we can do no more than record our view that the Tribunal’s approach does not give s 7 an unduly broad operation.
37 Whilst the answer to question two, as it is formulated, may be "yes", we reject the applicant’s contention that the Tribunal erred in any relevant regard.
Ground 7
38 The complaint here is that the Tribunal approached the words "in respect of" in Pt II of Schedule 2 by reference to the ordinary meaning of that phrase rather than to the "dictionary" in s 7(4). The Tribunal’s reasons at [59] to [62] are pointed to in this connection. There is no doubt that read in isolation these paragraphs support the complaint. After quoting from authorities stressing the wide ambit of "in respect of", the Tribunal says at [62]:
Applying these principles to the entry regarding the CSIRO, Part II of Schedule 2 requires that there be a connection between the document to which access is sought and the CSIRO’s commercial activities. Once a sufficient connection is found so that the document can be said to be ‘in respect of its commercial activities’, the CSIRO will be exempt from the operation of the FOI Act in relation to that document.
39 Despite the foregoing, a reading of the Tribunal’s reasons as a whole makes inevitable the conclusion that the case was decided by reference to the meaning given to "in respect of" by s 7(4). At [46] the Tribunal sets out s 7(4). At [47] it quotes the CSIRO entry in the Schedule – "in respect of its commercial activities" – to which s 7(4) refers. At [87], when considering ABC, the Tribunal says:
Section 7(4) assists in ascertaining the documents that are in respect of the particular activities but Bennett J’s interpretation requires a further connection to be made. That is, she requires a connection to be made between the documents as ascertained by reference to s 7(4) and other documents that can be said to be ‘in relation’ to those documents.
ABC was not an "in respect of" case. Thus the Tribunal’s reference in the first sentence of [87] to cases when s 7(4) "assists in ascertaining the documents that are in respect of the particular activities", is to cases such as that before it.
40 At [90] to [95], under the bold heading "Identifying the documents ‘in respect of’ commercial activities: s 7(4)" the Tribunal examines the subsection in detail. First it quotes the operative part of the provision. Then it says the meaning of "received, or brought into existence" seems clear. Then it considers the timing issue in relation to receipt or creation of documents. It moves on to consider the meaning of "in the course of" and "for the purposes of". At [95] it says that given the expanded meaning of "commercial activities" in s 7(3), "the documents coming within the scope of s 7(4) are not limited to those that are received or brought into existence in the course of or for the purposes of activities being carried on ... at the time they are received or brought into existence".
41 At [131] the Tribunal reads s 7(3)(a) and (4) together:
When [s 7(4)] is read with s 7(3)(a), the effect ... is that documents received or brought into existence in the course of, or for the purposes of, the carrying on of commercial activities are regarded as documents in respect of particular activities. Section 7(4) clearly shows that regard is had to the proper characterisation of the documents at the time that they were received or brought into existence.
42 At [132], in considering s 7(3)(b), the Tribunal says that the answer to the question ‘When is the question posed by par (b) to be assessed?", is provided by s 7(4):
because that provision identifies the documents that are to be regarded as documents in respect of the activities specified in Part II of Schedule 2.
43 The Tribunal considers s 7(4) again at [161]. In the opening lines it renders the effect of the subsection, though it does not actually quote it. It says that each document
was either received or brought into existence both in the course of and for the purpose of the CSIRO’s commercial activities as described in s 7(3)(b).
The emphasised words are those of s 7(4). Further, the passage just quoted links subsections (3)(b) and (4). The last sentence of [161] records the Tribunal’s satisfaction that all documents come within s 7(4).
44 In [162] the Tribunal says:
Having come within the terms of s 7(4), the documents would be within the documents described in Part II of Schedule 2 in relation to the CSIRO.
Once again the Tribunal makes the link between "in respect of its commercial activities" in the Schedule and the meaning given to it in s 7(4). The link appears again at [165].
45 In the light of the foregoing consideration of the Tribunal’s reasons as a whole, the claim that it determined whether the documents were "in respect of [CSIRO’s] commercial activities" for the purposes of the Schedule by reference to the ordinary meaning of "in respect of" rather than by resort to s 7(4) has no substance. The passages at [59] to [62] of the Tribunal’s reasons on which the applicant relies are shown by what follows them to be no more than incidental to the Tribunal’s decision-making.
46 Whilst we would answer question 7 affirmatively, we do not find any relevant error in the Tribunal’s analysis.
47 For the forgoing reasons, the applicant fails to establish error in the
Tribunal’s decision.
The respondent’s notice of
contention
48 By a notice of contention, the respondent argued that the Tribunal’s findings of fact, as set out in paragraphs [156]-[159], necessitated the conclusion that the CSIRO’s activities within the WLAN project between 1991 and 1993 were carried on by CSIRO on a commercial basis in competition with non-government entities, within the meaning of s 7(3)(a). According to the respondent, the critical findings in this regard were:
(1) the WLAN project must be seen as a long-term project because the nature of what was developing necessarily means that such projects take a long time to achieve, and they involve work with others, work that must be drawn together to take advantage of opportunities presented by the market ([156]).(2) Those in the CSIRO began their research with the long term aim of achieving a commercial advantage in the market place ([157]).
(3) The preliminary market research conducted by CSIRO was consistent with its stated aim of wanting to be the market leader in the technology, to gain the market advantage and to earn revenue by licensing the technology it developed ([157]).
(4) The major market opportunity for the CSIRO’s technology arose in the mid-1990s, by which time the CSIRO had already targeted the USA as a potential market for the technology the CSIRO was developing, supporting the reasonableness of CSIRO’s earlier decision to undertake its research and position itself to take advantage of it ([158]).
(5) CSIRO’s activities in 1991-1993 were directed to the possibility of returning a profit or benefit for CSIRO ([159]).
Accordingly, so the respondent argued, even if the Tribunal’s findings in respect of s 7(3)(b) were in error, the Tribunal should have reached the same decision on the basis that s 7(3)(a) was satisfied.
49 Having regard to the outcome of the applicant’s challenge to the Tribunal’s decision, nothing much turns on this argument. We would, however, indicate that we discern no error at this point in the Tribunal’s reasons. The Tribunal found as a fact that the CSIRO was not carrying out activities on the WLAN project on a commercial basis at the time the documents were received or created. It set out the basis for this finding when it said that, although these activities were directed to the possibility of returning a profit, the possibility was "too remote" to justify the finding that these activities were "related to making a return, let alone a profit". Put another way, the Tribunal determined that, on the evidence before it, at the relevant time the relationship between the activities in question (research and development of the WLAN technology) and the ultimate goal (receipt of profit or return in competition with others) was too attenuated to be properly characterised as "being carried on on a commercial basis" within s 7(3)(a), although on the evidence there was a reasonable expectation (i.e., not a fanciful or irrational one) that in the foreseeable future these activities would provide a return or profit. These findings of fact were plainly open to the Tribunal on the evidence. The respondent argued that activities were carried on on a commercial basis in competition with others when the activities were capable of returning a profit from the market place and a possible commercial return was an ultimate goal of these activities. The point the Tribunal made, however, was that, at the relevant time, the activities in question were unable to return a profit, although they would be capable of so doing in the foreseeable future.
50 We would reject the first ground of the respondent’s notice of contention.
51 The second ground of the notice of contention called into question an approach that derived from Bennett J’s reasons for judgment in ABC. The respondent contended that the finding recorded in [161] of the Tribunal’s reasons necessarily established that it was exempt from the operation of the FOI Act in relation to the documents on the basis that they fell within s 7(2) of the FOI Act. For the reasons previously stated, we agree. We agree that it was unnecessary, for the purpose of finding that the respondent was exempt from the operation of the FOI Act in relation to documents within s 7(2), for the Tribunal to find that each of the documents was a document in relation to another document in respect of the CSIRO’s commercial affairs.
52 Like this case, ABC concerned s 7(2) and Pt II of Schedule 2 of the FOI Act, which includes the ABC "in relation to its program material and its datacasting content". At issue in ABC was the meaning of this expression in the Schedule. The ABC argued, and Bennett J accepted, that the expression covered documents relating to program material, as well as program material itself. This conclusion is unexceptional. It is an aspect of her Honour’s reasoning that has given rise to the difficulty to which the notice of contention refers. After noting that s 7(2) provides that the bodies specified in the Schedule are exempt "in relation to the documents referred to in that [Schedule]", her Honour said (at [10]):
There is no need to repeat ‘in relation to’ in the Schedule unless it adds a further qualification. The fact that this expression appears in each entry in the Schedule means that, putting the section and the Schedule together, exemption is granted ‘in relation to ... in relation to’ the category specified.
Whilst acknowledging that the repetition of "in relation to documents" may have been unnecessary, Bennett J also said (at [17]):
[T]he repeated use of ‘in relation to’ reinforces an intention to exempt not only the category of documents specified but also documents that relate to that category.
53 Whilst we agree with her Honour that the expression "in relation to" in s 7(2) and in Pt II of Schedule 2 makes it clear that a relevant agency is exempt from the operation of the FOI Act "in relation to" the documents mentioned in the Schedule "in relation to them", we do not consider that the further use of the expression "in relation to" in Pt II of the Schedule is intended to add a further qualification. We consider that the use of the expression "in relation to" in Pt II of the Schedule is merely intended to pick up (and, in this sense, repeat) the use of the expression in s 7(2). The expression is used to tie the subsection and the Schedule together and not to introduce a further qualification. As the present case demonstrates, there is no good reason for the suggested further qualification, which would deny protection to documents created in the course of, or for the purposes of, commercial activities unless they were also shown to have some relationship to some such other documents. Such a suggested limitation would serve little purpose. Bearing in mind s 3(2) of the FOI Act, we do not think that the Parliament intended s 7(2) and Pt II of Schedule 2 to be read in this way.
54 As it happens, although the Tribunal discussed the effect of ABC
on the applicant’s FOI Act request, the Tribunal’s ultimate decision
was not affected by the analysis in ABC. Accordingly, for the reasons
given, we would dismiss the application, with costs.
Associate:
Dated: 20
March 2008
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Counsel for the Respondent:
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Solicitor for the Respondent:
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URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/40.html