Cianfrano v Director General, NSW Department of Commerce [2007] NSWADT 99 (1 May 2007)

Last Updated: 1 May 2007

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION: Cianfrano v Director General, NSW Department of Commerce [2007] NSWADT 99


DIVISION: GENERAL DIVISION

PARTIES: APPLICANT
Robert Cianfrano
RESPONDENT
Director General, NSW Department of Commerce



FILE NUMBERS: 063211

HEARING DATES: 19 September 2006

SUBMISSIONS CLOSED: 23 October 2006



DATE OF DECISION: 1 May 2007

BEFORE: Montgomery S - Judicial Member





LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Freedom of Information Act 1989

CASES CITED: BY v Director General, Attorney General's Department [2002] NSWADT 79
Cianfrano v Director General, Attorney General's Department [2007] NSWADT 8
Cianfrano v Director General, Department of Commerce and Anor [2006] NSWADT 195.
Cianfrano v Director General, New South 'Wales Treasury [2005] NSWADT 7.
Daniels Corp International Pty Limited v Australian Competition and Consumer Commission [2002] HCA 49
Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49;
Fulham v Director General, Department of Environment and Conservation Cianfrano v Director General, Department of Commerce and anor [2005] NSWADT 282
General Manager, WorkCover Authority of NSW v Law Society of NSW [2006] NSWCA 84
Howell v Macquarie University (GD) [2007] NSWADTAP 10.
Ingot Capital Investments Pty Limited & Ors v Macquarie Equity Capital Markets Limited & Ors [2006] NSWSC 530
Mann v Carnell (l999) [1999] HCA 66; 201 CLR 1
Miriani v Commissioner of New South Wales Police [2005] NSWADT 187
Patsalis v Commissioner of Police, New South Wales Police Service [2003] NSWADT 213
Re Packer and Others v Deputy Commissioner of Taxation (1983) 53 ALR 589
Re Wilson and Australian Federal Police (1983) 5 ALD 343
Seven Network Limited v News Limited [2005] FCA 142
Trade Practices Commission v Sterling [1979] FCA 33; (1979) 36 FLR 244
University of New South Wales v Gerard Michael McGuirk [2006] NSWSC 1362.
Vincent Neary v State Rail Authority [1999] NSWADT 107

APPLICATION: access to documents - business affairs
access to documents - legal professional privilege
Freedom of Information Act - access to documents - business affairs
Freedom of Information Act - access to documents - legal professional privilege

MATTER FOR DECISION: Principal matter


REPRESENTATION:
APPLICANT
In person
RESPONDENT
A Johnson, Solicitor

ORDERS: The matter is set down for further directions on 5 June 2007 at 10.30am.


Reasons for Decision:

REASONS FOR DECISION

1 Mr Cianfrano made an application under the Freedom of Information Act 1989 ("the FOI Act") to the Director-General of the Department of Commerce ("the Agency") seeking:

access to documents relating and pertaining to the NSW Department of Commerce and or the Attorney General's Department and or the Crown Solicitor's Office, into the costs incurred to all FOI application and ADT appeals made by Robert Cianfrano.

2 A delegate of the Director-General determined that there were twelve documents that fell within the scope of the application. A schedule prepared by the Agency identified the following documents:

Document A dated 17 February 2006 is a Tax Invoice (with attached Petty cash recoup and LitSupport Invoice) forwarded by the Crown Solicitor's Office ("the CSO") to Marica Doheny in the Agency
Document B dated 25 May 2004 is a Tax Invoice forwarded by the CSO to Kingsley Perry in the Agency
Document C dated 17 August 2004 is a Tax Invoice (with attached timesheet and letter) forwarded by the CSO to Kingsley Perry in the Agency
Document D dated 25 May 2005 is a Tax Invoice (with attached LitSupport Invoice) forwarded by the CSO to Marica Doheny in the Agency
Document E dated 29 April 2005 is a Tax Invoice (with attached letter and itemized timesheet) forwarded by the CSO to Marica Doheny in the Agency
Document F dated 30 May 2005 is a Tax Invoice (with attached itemized timesheet and letter) forwarded by the CSO to Marica Doheny in the Agency
Document G dated 2 June 2005 is an email regarding costs forwarded by Phil Havenstein in the Agency to Jenny Wiggins in the Agency
Document H dated 30 June 2005 is a Tax Invoice (with attached itemized timesheet and letter) forwarded by the CSO to Marica Doheny in the Agency
Document I dated 7 July 2005 is a Tax Invoice (with attached itemized timesheet) forwarded by the CSO to Marica Doheny in the Agency
Document J dated 5 September 2005 is a Tax Invoice (with attached itemized timesheet and letter) forwarded by the CSO to Marica Doheny in the Agency
Document K dated 9 September 2005 is a Tax Invoice (with attached itemized timesheet and letter) forwarded by the CSO to Marica Doheny in the Agency
Document L dated 13 February 2006 is an email regarding recovery of costs forwarded by Kingsley Perry in the Agency to Phil Havenstein in the Agency

3 Full access was granted to three documents (documents A, D and G) and partial access was granted to a further nine documents (documents B, C, E, F, H, I, J, K and M). The Agency asserted that portions of those documents are exempt pursuant to clause 7(1)(c) of Schedule 1 to the FOI Act on the basis that the information in the documents was of commercial value to the CSO. The information that was deleted was information that the Agency asserts is relating to the hourly rates charged by the CSO, or information from which the hourly rates of the CSO could be deduced.

4 The Agency asserted that Document L is exempt pursuant to clause 10 of Schedule 1 to the FOI Act because it was said to be covered by legal professional privilege.

5 Mr Cianfrano sought an internal review of the determination and asserted that the search that had been undertaken was not sufficient. The internal review affirmed the original determination.

6 Mr Cianfrano applied to this Tribunal for a review of the Agency’s determination. A further document ("Document M") was subsequently identified as falling within scope. Document M dated 30 June 2004 is a Tax Invoice (with attached timesheet and letter) forwarded by the CSO to Kingsley Perry in the Agency

Applicable Legislation

7 Section 5 of the FOI Act provides that the objects of the FOI Act are to extend, as far as possible, the rights of the public to obtain access to information held by the Government. Section 16 of the FOI Act provides that a person has a legally enforceable right to be given access to an agency's documents in accordance with the FOI Act. The legally enforceable right to be given access to documents is subject only to such restrictions as are reasonably necessary for the proper administration of the Government. The discretions conferred by the FOI Act shall be exercised, as far as possible, so as to facilitate and encourage the disclosure of information.

8 Under section 25(1)(a) of the FOI Act, an agency has discretion to refuse access to a document if it is an exempt document. Pursuant to section 61 of the FOI Act the Agency has the burden of establishing that its determination was justified.

9 Clause 7(1)(c) of Schedule 1 of the FOI Act provides as follows:

7 Documents affecting business affairs
(1) A document is an exempt document:
...
(c) if it contains matter the disclosure of which:

(i) would disclose information (other than trade secrets, commercial-in-confidence provisions or information referred to in paragraph (b)) concerning the business, professional, commercial or financial affairs of any agency or any other person, and
(ii) could reasonably be expected to have an unreasonable adverse effect on those affairs or to prejudice the future supply of such information to the Government or to an agency.

10 Clause 10 of Schedule 1 of the FOI Act provides as follows:

10 Documents subject to legal professional privilege
(1) A document is an exempt document if it contains matter that would be privileged from production in legal proceedings on the ground of legal professional privilege.
(2) A document is not an exempt document by virtue of this clause merely because it contains matter that appears in an agency’s policy document.

The Agency’s Case

11 There are two issues for determination. Firstly, whether the search undertaken by the Agency was sufficient to identify all the documents which fall within the scope of the FOI application; and secondly, whether the withheld documents should be released to the Applicant.

The sufficiency of the Agency's search

12 The jurisdiction of the Tribunal to review the question of whether a sufficient search has been undertaken in response to an FOI request, was considered in Cianfrano v Director General, Department of Commerce and Anor [2006] NSWADT 195. The Tribunal’s President rejected the Agency’s argument that the Tribunal did not have jurisdiction to examine the sufficiency of an agency's search for documents in response to an FOI application. He held that where an applicant raises an argument that an agency has failed to locate relevant documents, and puts before the Tribunal some credible material or submissions which persuade the Tribunal that an arguable case exists, the Tribunal has jurisdiction to determine whether the Agency has failed to address all documents in its possession. The decision in Cianfrano has been appealed to an Appeal Panel which has, in turn, referred the issue to the Supreme Court, pursuant to section 118 of the Administrative Decisions Tribunal Act 1997 ("the ADT Act")

13 Ms Johnson submits that the ultimate issue for the Tribunal is whether the Agency's conclusion, that it does not hold the documents sought by the applicant, is sound. She referred to a number of authorities which support the contention that in determining whether a sufficient search has been undertaken the questions for consideration are (a) whether there are reasonable grounds to believe that the requested documents exist and are documents of the Agency; and if so, (b) whether the search efforts made by the Agency to locate such documents have been reasonable in all the circumstances of a particular case: see Patsalis v Commissioner of Police, New South Wales Police Service [2003] NSWADT 213 and in particular the cases referred to at [50] - [53].

14 What constitutes a sufficient search will vary with the circumstances. In Miriani v Commissioner of New South Wales Police [2005] NSWADT 187 at [30] the Tribunal’s President set out some key factors in assessing whether a sufficient search had been carried out. These factors included the clarity of the request, the way the Agency's recordkeeping system is organised and the ability to retrieve any documents that are the subject of the request, by reference to the identifiers supplied by the applicant or those that can be reasonably inferred by the Agency from any other information supplied by the applicant.

15 The applicant identified a category of documents (ie documents relating to counsel’s fees) that he said was missing from the Agency’s schedule of documents. The Agency concedes the use of counsel and undertook a further search for documents. It located an additional invoice that had been identified in the initial search, but subsequently had been overlooked.

16 The Agency asserts that it has conducted a thorough search for documents, and that there are no reasonable grounds for believing that it holds additional documents. It relies on the evidence of its FOI co-ordinator, Mr Phil Havenstein, with respect to the searches it has undertaken. Mr Havenstein provided a statement of evidence, appeared at the hearing and was subjected to cross-examination. Ms Johnson submits that the Agency’s mechanism for searching for documents is certainly sufficient to constitute a reasonable search as required by Patsalis.

Claims for exemption under clause 7(1)(c)

17 The Agency claims that the information in documents B, C, E, F, H, I, J, K and M would disclose the hourly rates charged by the Crown Solicitor's Office and that this information is exempt under clause 7(1)(c). The Agency relies on the decision in Vincent Neary v State Rail Authority [1999] NSWADT 107 in support of its claim for exemption. In Neary the Tribunal’s President considered whether the disclosure of information in the Crown Solicitor's Office's invoices was exempt matter under the FOI Act. His Honour said at [40] to [41]:

40As to the information in relation to expenditure on services provided by the Crown Solicitor’s Office, release of information as the total amounts paid does not, I consider, place at risk in any meaningful way the nature of the arrangements that might exist between the agency and that Office. The only information shown in the invoices which might, arguably, fall within the protection of the exemption is the reference (found in hand-writing on two of the invoices) showing a multiple of a number (the hours of service rendered) and an hourly rate.
41That information does, I consider, bear on the contractual relationship between the agency and the Office. It gives an insight into what rate the Office charges for a certain class of work. That information, if known to others with whom the agency deals in relation to the provision of legal services, might give an advantage to those third parties in negotiation of rates. Consequently, applying the tests referred to, I consider that the hand-written references to the hours and hourly rates should be exempted from disclosure.

18 The decision in Neary has been followed in relation to both the fees charged by the Crown Solicitor's Office and the fees charged by other consultants: see for example Fulham v Director General, Department of Environment and Conservation [2005] NSWADT 68, Cianfrano v Director General, Department of Commerce and anor [2005] NSWADT 282 and Cianfrano v Director General, New South 'Wales Treasury [2005] NSWADT 7. Ms Johnson submits that it should be followed in this matter as a matter of judicial comity. In support of this submission she relies for views expressed by the President in BY v Director General, Attorney General's Department [2002] NSWADT 79 at [22] - [23].

22 In my view, a later Tribunal should exercise caution in reopening prior, considered rulings of an earlier Tribunal. Ordinarily a later Tribunal should adopt the ruling of the earlier Tribunal; and leave these questions to be finally determined within the Tribunal at the Appeal Panel level. ...
23 Normally a prior considered Tribunal ruling should only be reopened if a new, significant argument is raised before the later Tribunal. This is not such a case. Nonetheless, I consider that some discretion should be allowed to a Divisional Head sitting at first instance to revisit prior rulings, where the Divisional Head has doubts about the prior rulings or the questions involved are of great significance, such as ones raising important issues of power or jurisdiction. (Such a ruling may itself be appealed to the Appeal Panel. In that event, the Divisional Head, who would customarily preside, is ineligible. Where there is an appeal in relation to such a ruling, the Appeal Panel should, in my view, give consideration, if it regards the ruling as doubtful, to referring the controversial question to the Supreme Court for determination.)

19 Ms Johnson submits that the CSO operates in a competitive environment. It is one of a panel of firms that the Agency can instruct in FOI matters. Other law firms regularly lobby the Agency to be instructed in FOI matters. Mr Havenstein’s evidence supports this submission. The CSO's hourly rates is a factor that makes it competitive when seeking to win work from the Agency, and presumably, from other government agencies. Ms Johnson contends that the Tribunal should follow the decision in Neary, and determine that the hourly rates of the Crown Solicitor's Office and information which could allow these hourly rates to be deduced is properly exempt under clause 7(1)(c).

Claims for exemption under clause 10

20 Document L is an email from a solicitor employed by the CSO to Mr Perry, the Principal Solicitor of the Agency, seeking instructions in relation to an FOI matter. Mr Perry forwarded the email to Mr Havenstein with a recommendation as to what those instructions should be. The instructions were sought in the context of litigation being conducted before this Tribunal.

21 Ms Johnson referred to the Court of Appeal decision in General Manager, WorkCover Authority of NSW v Law Society of NSW [2006] NSWCA 84 that held that the tests set down by the High Court in Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49; as amplified in Daniels Corp International Pty Limited v Australian Competition and Consumer Commission [2002] HCA 49 apply to a claim for exemption under clause 10. McColl JA said at [67] - [68]:

67 Legal professional privilege is a rule of substantive law which enables a person to resist the giving of information or the production of documents to a third party which would reveal confidential communications between the person and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings: Daniels Corporation International Pty Ltd and Anor v Australian Competition and Consumer Commission (at [9]) per Gleeson CJ, Gaudron, Gummow and Hayne JJ; Esso Australia Resources Ltd v Commissioner of Taxation.
68 The rationale of legal professional privilege is "that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline"...

22 Ms Johnson also referred to the statement of Lockhart J in Trade Practices Commission v Sterling [1979] FCA 33; (1979) 36 FLR 244 at 245-6 which has been adopted in several Tribunal decisions as usefully defining the categories of circumstances in which legal professional privilege can arise. She submits that the Agency had at least two legal advisers, the CSO and Mr Perry. Document L as a communication between the CSO and Mr Perry fell squarely into category (c) of the categories identified by Lockhart J in Sterling:

(c) communications between the various legal advisers of the client, for example, between the solicitor and his or her partner or his city agent with a view to the client obtaining legal advice or assistance;

23 Mr Perry is the holder of a practising certificate, and there is nothing in Document L to suggest that he was not giving impartial, independent legal advice. When Mr Perry recommended to Mr Havenstein that certain instructions be given to the Crown Solicitor, he was providing legal advice and assistance to the Agency, so that his communication fell squarely within category (a) of the decision in Sterling:

(a) any communication between a party and his or her professional legal adviser if it is confidential and made to or by the professional adviser in his or her professional capacity and with a view to obtaining or giving legal advice or assistance, notwithstanding that the communication is made through agents of the party and the solicitor or the agent of either of them;

24 Ms Johnson’s alternative submission is that Mr Perry was not receiving the CSO email as a lawyer, but merely as an officer of the Agency. He then passed that email on to Mr Haverstein as a means of discussing what the Department's instructions should be. If the communication is characterised in this way, then the communication between the CSO and Mr Perry remains in category (a) of Sterling however Mr Perry's email to Mr Havenstein falls squarely into category (d) of Sterling:

(d) notes, memoranda, minutes or other documents made by the client or officers of the client or the legal adviser of the client of communications which are themselves privileged, or containing a record of those communications, or relate to information sought by the client's legal adviser to enable him or her to advise the client or to conduct litigation on behalf of the client;

25 She further submits that the Tribunal should reject the contention that the decision in Ingot Capital Investments Pty Limited & Ors v Macquarie Equity Capital Markets Limited & Ors [2006] NSWSC 530 is authority for the proposition that litigation privilege does not apply to proceedings before the Tribunal.

26 She says that regardless which of these alternative characterisations is adopted, the communication is plainly privileged and therefore exempt under clause 10.

Mr Cianfrano’s Case

27 Mr Cianfrano asserts that the Agency has failed to undertake a sufficient search for documents that fall within the scope of his application. He says that there are additional documents that should be held by the Agency that the Agency has not identified. He points to the ‘non production of all documents including invoices and accounting documents paid, to barristers and senior counsel’ the ‘non production of all documents as to payable invoices and accounting documents from barristers and senior counsel’ and the ‘non production of all documents as to all fees paid to barristers and senior counsel’.

28 He argues that as the Agency is alleging that good reason exists for withholding information it is expected to bring forward material to support that proposition. He says that the evidence as to the searches undertaken is inadequate. He further submits that the statement of evidence and the submissions are insufficient in relation to the dominant purpose for which Document L came into existence.

29 Mr Cianfrano submits that the non-production of documents with respect to counsel fees suggests that the search for documents undertaken within the Agency was inadequate. He points to views expressed in the Commonwealth Administrative Appeals Tribunal in Re Wilson and Australian Federal Police (1983) 5 ALD 343 at [26]:

26. There are, on the other hand, indications within the Act that the expression 'refusal to grant access' is used not only in relation to documents that are known to exist but also in circumstances where a requested document has not been located, may not be capable of being located or may not even exist (see for example ss.24 and 56). Furthermore, it requires a high degree of confidence in the filing systems of large agencies to assume that documents can always be readily identified and located upon request. The probabilities are that, in at least a percentage of cases where requested documents are said to be incapable of being found, those documents nevertheless do exist and have simply been incorrectly filed or filed under some unexpected reference. Thus, a claim by an agency that a requested document cannot be found does not necessarily mean that no such document exists.

30 Mr Cianfrano submits that the Tribunal has jurisdiction to deal with applications concerning the adequacy or sufficiency of an agency’s search. He relies on the decision in Cianfrano and authorities referred to in that decision as supporting this submission.

31 Mr Cianfrano submits that the Agency and the CSO are claiming exemptions and are using the pretext of exemptions and privileges as a shield against disclosure of information as it is embarrassing to the Government in that it raises issues of probity. He requests that all documents in question are to be examined by the Tribunal to determine whether the claimed exemptions are applicable.

Claims for exemption under clause 7

32 Mr Cianfrano contends that the information in issue could not reasonably be regarded as "business" information to which the test in clause 7(1)(c)(ii) might be applied. He says that it is not information that has an intrinsic commercial value of the kind considered in the various authorities that have been cited.

33 In regard to the question of whether disclosure of information would have an unreasonable impact on an agency's business for the purposes of clause 7(1)(c)(ii) Mr Cianfrano referred to views of the Tribunal’s President in Neary where he stated at [35]:

35 An objective view must be brought to bear on an agency's claim that release will have an adverse impact on its financial affairs. The Tribunal should approach issue from the viewpoint of a reasonable administrator. The administrator should have reasonable grounds for his or her perception. There must be more than a mere risk. While the key word used in the relevant provision - `expect' - carries a firmer connotation than words such as `anticipates', it is not necessary that the level of risk be such that it be assessed as more probable than not. Nor is it necessary for the administrator to apply a balance of probabilities calculus similar to that used to set the burden of proof in litigation. All relevant factors, including public interest considerations, should be taken into account. The extent and nature of the effect will be relevant, and often decisive. It is necessary to assess what is reasonable in the circumstances.

34 Mr Cianfrano says that the CSO is locked into a three-year contract and that release of the information will not impact on that contract. He says that any new contract will be negotiated and the terms of that contract will not be affected by release of the information contained in these documents.

Claims for exemption under clause 10

35 Mr Cianfrano submits that legal professional privilege cannot be invoked for communications that are not in the context of "legal advice" from a practising lawyer. A communication is not "legal advice" simply because a lawyer may be the source of the information. The lawyer must be acting in a professional capacity, not an executive one, and the information must have come into existence for the purpose of providing legal advice.

36 He refers to views expressed by Tamberlin J in Seven Network Limited v News Limited [2005] FCA 142 with respect to the approach to be taken when a privilege claim is disputed. It is for the party claiming the privilege to establish the claim. This is usually established by the evidence from a person or persons deposing to both the provenance of the documents in issue and the dominant purpose for which they came into existence.

37 He asserts that the statement of evidence on which the Agency relies is unsatisfactory. Legal professional privilege does not exist by mere assertion of the Agency. Each document must be examined by the Tribunal to decide the true character of the document and whether the document is truly one to which privilege applies. He says that much correspondence to and from the CSO is purely administrative, and does not fall into the legal professional privilege exemption, as will be evident on examination by the Tribunal.

38 Mr Cianfrano relies on the Supreme Court of Queensland decision in Re Packer and Others v Deputy Commissioner of Taxation (1983) 53 ALR 589 as authority for the principle that privilege applies only if the lawyer is acting in a professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client. Thus, the privilege will not apply where the communications relate to the provision by the lawyer of business, or policy, rather than legal advice. Where the lawyer is a government employee, his or her advice as to the policy to be followed in the administration of an Act is not legal advice. If the document satisfies the test for privilege, but also contains material that may be factual or contain administrative as distinct from legal advice it will not remove the operation of the privilege. Nor does it matter that the document might also fulfil some secondary need or function such as administrative efficiency or administrative requirements. However, the presence of extraneous matter may raise a question of fact as to the purpose of the creation of the document.

39 Further, if there is some communication from or to some other person who may just happen to be a legal practitioner, this does not confer any legal professional privilege to that communication. The reason is that there is no solicitor-client relationship in such a matter.

40 Mr Cianfrano submits that Document L is an email from a solicitor employed by the CSO to Mr Perry, the Agency’s Principal Solicitor, seeking instructions. Mr Perry forwarded the email to Mr Havenstein with a recommendation as to what those instructions should be. This is an in-house lawyer-departmental officer communication. Mr Cianfrano submits that a request for an opinion about a document does not impart legal professional privilege to that document. He further submits that the forwarding of the email to Mr Havenstein constitutes a waiver of any privilege that might have attached to the document.

41 He further submits that the decision in Ingot Capital Investments Pty Limited & Ors v Macquarie Equity Capital Markets Limited & Ors is authority for the proposition that litigation privilege does not apply to proceedings before the Tribunal.

42 Accordingly Mr Cianfrano submits that the Agency has failed to establish any factual basis on which legal professional privilege could arise, and therefore Document L must be released.

43 Mr Cianfrano further submits that the decision in Neary is not relevant to this aspect of the present application. He says that in this matter the CSO was not engaged in core work. This is to be contrasted with the situation in Neary where the CSO was working in a core capacity as government departmental officers. He says that the CSO are the only solicitors that can be engaged as per the Premiers memo 95-39. Therefore the decision in Neary is not applicable as the in-house lawyer’s work is unaffected by commercial enterprise. He also argues that the decision in Sterling is irrelevant in this case.

44 Mr Cianfrano also submits that the Agency has a duty under section 25(4) of the FOI Act to consider whether it is practicable to give access to a copy of the document from which the exempt matter has been deleted. Access should be granted to an exempt document in a form by which exempt matter is deleted from the face of the documents if that is practicable and that is what Mr Cianfrano would wish.

The public interest

45 Mr Cianfrano further submits that agencies must consider whether the public interest would be served by the release of documents even when an exemption clause may apply. An underlying principal in the legislation is that documents should be released unless there is a good reason why they should remain exempt. He referred to views expressed in the NSW Ombudsman's 2004-2005 Annual Report in which the Ombudsman was critical of agencies that failed to give reasons for exempting documents and stated: ‘This approach can sometimes reflect the underlying motivation of the decision maker to protect the Agency or the government from public scrutiny or possible embarrassment. The proper operation of the FOI Act requires decision-makers to exercise their statutory discretion in accordance with the Act - not in accordance with political imperatives.’

46 Mr Cianfrano submits the onus of proof lies on the Agency to establish that the exemption applies and the denial of access is justified. He further submitted that an examination of each document by the Tribunal would enable the Tribunal to clearly decide on the documents to be made available, without any deletions. He contends that the Agency has failed to show that the exemptions apply to the documents in question and that not all documents have been discovered. He asserts that this is consistent with improper conduct and improper facts presented in relation to the exemptions.

Tribunal may report improper conduct

47 Section 58 of the FOI Act provides that if, as a result of a review application, the Tribunal is of the opinion that an officer of an agency has failed to exercise in good faith a function conferred or imposed on the officer by or under this Act, the Tribunal may take such measures as it considers appropriate to bring the matter to the attention of the responsible Minister for the Agency.

48 Mr Cianfrano submits that the Tribunal is obliged to send a message to the Agency that officers in the Agency are trying to avoid their obligations under that Act.

Findings

49 I have been provided a copy of the documents that are in dispute and I have examined each of those documents.

Findings with respect to business affairs

50 The Agency asserts that documents B, C, E, F, H, I, J, K and M concern the business affairs of the CSO and are exempt from release pursuant to clause 7 of Schedule 1 to the FOI Act. Mr Cianfrano does not concede this point. He submits that the release of the information sought would have no adverse effect and that the information should be disclosed in the public interest.

51 I agree with the Agency that the documents satisfy the first limb of clause 7(1)(c). This is consistent with the approach adopted in numerous decisions by this Tribunal. I note the Agency’s reliance on the views expressed in Neary. I agree with those views. I do not agree with Mr Cianfrano’s submission that Neary has no application in this matter.

52 The issue for determination is therefore whether the disclosure of the information could reasonably be expected to have an unreasonable adverse effect on the affairs of the CSO.

53 In my view, it is reasonable to expect that the disclosure of the information contained within these documents would enable the CSO’s competitors to understand and perhaps undercut the CSO’s pricing strategy. I agree with the Agency that this satisfies the second limb of clause 7(1)(c). I do not consider that this is altered by the fact that the CSO is locked into an existing contract with the Agency. The CSO may well be tendering for work with other agencies and the release of information that would allow competitors to identify the CSO’s fee structure may well have an adverse effect in relation to those contracts.

54 However, in my view it is practicable to give access to a copy of the document from which information has been deleted and thereby remove the adverse effect that might otherwise result to the CSO. In my view, the disclosure of the information in the amended form would not reasonably be expected to prejudice the future supply of such information. It is my view that these documents should be releases in the amended form. I note that this is the approach taken by the Agency and that the documents have been released in the amended form. Accordingly the determination is affirmed in relation to documents B, C, E, F, H, I, J, K and M.

Findings with respect to legal professional privilege

55 The issue for determination is whether or not legal professional privilege attaches to Document L. Document L is in two parts. Firstly an email from a solicitor employed by the CSO to Mr Perry; and secondly, an email from Mr Perry forwarded the CSO email to Mr Havenstein.

56 I do not agree with Mr Cianfrano’s submission that Trade Practices Commission v Sterling has no application in this matter. The statement of Lockhart J has been widely adopted and provides a useful statement of the categories of circumstances in which legal professional privilege can arise.

57 The current state of the law as it relates to legal professional privilege is discussed at paragraphs [25] to [29] and [45] – [49] of the Appeal Panel decision in Howell v Macquarie University (GD) [2007] NSWADTAP 10. I adopt the summary provided by the Appeal Panel. It serves no purpose to repeat it here.

58 I accept the Agency’s evidence that both the CSO and Mr Perry were legal advisers to the Agency. I do not consider that it is of any significance for the purposes of this matter that Mr Perry is an in house solicitor. I agree with the Agency’s argument that the portion of Document L that is a communication between the CSO and Mr Perry falls squarely into category (c) of the categories identified by Lockhart J in Sterling. It is my view that it is a communication within a solicitor-client relationship for the purpose of legal advice.

59 I also agree with the Agency’s argument that the portion of Document L that is a communication between Mr Perry and Mr Havenstein falls squarely within category (a) of the decision in Sterling. It is a communication made by Mr Perry in his professional capacity with a view to giving legal assistance.

60 Accordingly, I am satisfied that legal professional privilege attaches to Document L.

61 I do not need to determine the issue of whether litigation privilege attaches to Document L. I note that I have previously considered the issue of whether Ingot Capital Investments Pty. Ltd. v Macquarie Equity Capital Markets Ltd is authority for the principle that litigation privilege does not apply in this Tribunal. I rejected that argument in my decision in Cianfrano v Director General, Attorney General's Department [2007] NSWADT 8. I remain of the view that litigation privilege does apply in this Tribunal and I adopt the reasoning that I presented in that decision. I note that the decision is under appeal.

62 I do not agree with Mr Cianfrano’s submission that the Agency has asserted that exemptions apply for an improper purpose of avoiding its obligations under the FOI Act. This is a case where it would be necessary to draw inferences of improper purpose from the surrounding circumstances and I do not agree that such an inference should be drawn.

63 It is also my view that the evidence does not support the alleged waiver of the privilege. The High Court in Mann v Carnell (l999) [1999] HCA 66; 201 CLR 1 referred to the principle that legal professional privilege exists to protect the confidentiality of communications between lawyer and client and that waiver is brought about by the inconsistency between the conduct of the owner of the privilege and maintenance of the confidentiality. In the circumstances of this matter I do not consider that there is any inconsistency between the conduct of the Agency and maintenance of the confidentiality.

Conclusion

64 In summary, I agree with the approach adopted by the Agency to the extent that it has released the documents that have been identified as falling within the scope of the FOI application. The material that has been withheld is exempt from release pursuant to either clause 7 or clause 10 of Schedule 1 of the FOI Act.

65 For completion, I note that in Cianfrano v Director General, Department of Commerce and Anor the Tribunal’s President rejected the Agency’s argument that the Tribunal did not have jurisdiction to examine the sufficiency of an agency's search for documents in response to an FOI application. It is my view that the search undertaken by the Agency was sufficient and the Agency is not required to undertake further searches in relation to this application. While I agree with Mr Cianfrano’s view one would expect the Agency to hold documents relating to counsel’s fees, I accept the evidence that the Agency does not hold those documents.

66 I note Mr Cianfrano’s submission that the Tribunal report the conduct of the Agency to the responsible Minister under s 58 of the FOI Act. I am not satisfied that any officer failed to exercise his or her functions in good faith and consequently I do not intend to report the conduct of the Agency to the responsible Minister.

Public Interest Override

67 Until recently there has been considerable debate with respect to the issue of whether the Tribunal has what is commonly referred to as a "public interest override" if it determines that the documents should be classed as exempt documents. The matter has now been resolved by Nicholas J in his recent decision in Agency of New South Wales v Gerard Michael McGuirk [2006] NSWSC 1362. He stated at paragraphs [102] - [103]:

102 In my opinion s 63 ADT Act provides the Tribunal with the discretion to order access to be given to documents which are exempt documents under the FOI Act if it decides that to do so is the correct and preferable decision with regard to the material then before it.
103 It follows that with respect to the overriding discretion issue I respectfully disagree with the conclusion expressed in Neary (para 83) that it is not open to applicants for review to seek an order, purportedly in exercise of powers conferred by s 25 FOI Act that a Minister or agency release an otherwise exempt document. In my respectful opinion the following passage from Mangoplah correctly states the position:

"85 Consistent with this jurisprudence, absent any special limitation on the Tribunal’s review function in applications under the FOI Act, it has the function by reason of s 63 of the ADT Act - indeed the duty - when reviewing a determination under ss 24 and 25 of the FOI Act to consider all issues arising in the case in relation to whether a document should be released. As indicated above, once a ground for refusal of access arises under s 25(1)(a) the issue arises whether to exercise the discretion to release an exempt document which is not a restricted document the subject of a Ministerial certificate. The decision under review must have, or must be taken to have, addressed this discretion before determining to refuse access on the ground of an exemption. The Tribunal must also address it".

68 This decision was handed down after the parties had closed their submissions in this matter. I note that the parties’ submissions touched on the issue of the public interest however in light of the decision in University of New South Wales v Gerard Michael McGuirk I think it is appropriate that they have an opportunity to present further argument with respect to how the Tribunal’s discretion should be exercised. The matter should be set down for further directions in respect of the outstanding matters.

DECISION

The matter is set down for further directions on 5 June 2007 at 10.30am.