Federal Court of Australia

Australian Conservation Foundation Incorporated v Secretary, Department of Climate Change, Energy, the Environment and Water [2023] FCA 1005

ORDERS

THE COURT ORDERS THAT:

1.    The decision of the Administrative Appeals Tribunal dated 14 December 2021 is set aside.

2.    The applicant’s application for the Tribunal to review the decision of a delegate of the respondent dated 2 May 2019 to refuse access to Documents 3, 10, 11, 22, 25 and 44(b) be remitted to the Tribunal to be re-determined according to law.

3.    Unless the respondent files and serves a submission on or before 1 September 2023 contending that an order should not be made that the respondent pay the costs of the applicant, the respondent pay the costs of the applicant.

4.    If such a submission is made, the question of costs be reserved for determination on the papers, on the basis that on or before 8 September 2023 the applicant file and serve a responding submission.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMBERG J:

1    In this proceeding, the Australian Conservation Foundation Incorporated (ACF) appeals a decision of the Administrative Appeals Tribunal. The appeal is brought pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). The appeal concerns a decision of the Tribunal to affirm a decision made by a delegate of the respondent (Secretary) under the Freedom of Information Act 1982 (Cth) (FOI Act) to refuse access to six documents held by the Secretary (Documents).

2    Those documents concern communications between the Department of Climate Change, Energy, the Environment and Water and a developer, the Walker Group Holdings Pty Ltd (Walker Group), concerning the potential development of apartment buildings at Toondah Harbour on Moreton Bay in Queensland (Toondah Harbour Project). The proposed development would be located on wetlands listed pursuant to the Convention on Wetlands of International Importance especially as Waterfowl Habitat. Opened for signature 2 February 1971. 996 UNTS 245 (entered into force 21 December 1975) (Ramsar Convention). At the time of the hearing, the proposal for the development of the Toondah Harbour Project was inactive and this proceeding was therefore not attended with particular urgency. Nevertheless, the appeal raises some important issues about the proper construction of the FOI Act.

Background

Environment Protection and Biodiversity Conservation Act 1999 (Cth)

3    The proposed Toondah Harbour Project engaged Ch 4 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). The EPBC Act provides for a two-tiered assessment system for proposals which potentially have environmental impacts, such as those with a potential impact on wetlands listed under the Ramsar Convention. The “environmental assessments and approvals process” under Ch 4 is summarised by Allsop CJ in Minister for the Environment v Sharma (2022) 291 FCR 311 at [64]-[80].

4    Broadly stated, at the first stage under Ch 4, the Minister must determine whether the proposed action is a “controlled action” and therefore needs environmental approval (Div 2 of Pt 7). Section 68 provides that “[a] person proposing to take an action that the person thinks may be or is a controlled action must refer the proposal to the Minister” under the EPBC Act (Minister) to determine whether they are “controlled actions”. The Minister must then decide under s 75 whether the proposed action is a “controlled action”. I will refer to this process as the formal “referral process” under the EPBC Act.

5    Once a referral has been made, the Minister must publish that referral on the internet and invite comment from the public and relevant State or Territory Ministers: s 74(2)-(3). There are also rigorous disclosure requirements with respect to referrals provided for by the Environment Protection and Biodiversity Regulations 2000 (Cth).

6    A proposal designated to be a “controlled action” under Ch 4 requires further rigorous assessment as set out in Pt 8 of the EPBC Act. A proposal that is not so designated does not require further assessment and may proceed without being sanctioned under the EPBC Act.

The Toondah Harbour Project and the “pre-referral process”

7    The Walker Group submitted three referrals to the Minister under s 68 of the EPBC Act for the Toondah Harbour Project between November 2015 and June 2018.

8    The significance of the referrals for the issues raised in this appeal arises largely from the fact that the referrals were dealt with through a particular departmental process. The Department has developed a practice of holding private meetings with potential proponents (referring parties) in which proposals are discussed prior to those proposals being formally submitted as referrals under the EPBC Act (pre-referral process). Evidence was given about that process in the affidavit and oral evidence provided to the Tribunal by Mr Andrew McNee, Assistant Secretary of the Department’s Environment Assessments (Queensland) and Sea Dumping Branch. The Secretary contended that these pre-referral discussions allow referring parties to provide an overview of their proposed action and provide an opportunity for the Department to explain the referral process and raise any potential concerns with a referring party’s proposal.

9    The pre-referral process is neither referred to, nor expressly sanctioned by, the EPBC Act. It is described by Mr McNee as a confidential process that is treated by the Department as not subject to any disclosure requirements provided for by the EPBC Act.

The request for access to documents

10    On 13 February 2019, the ACF lodged a request with the Department under the FOI Act to access categories of documents relating to the Walker Group’s pre-referral consultations with the Department.

11    On 2 May 2019, a delegate of the Secretary, Mr McNee, identified 144 documents that were subject to the ACF’s request and refused access to 12 documents. The ACF sought a review of the delegate’s decision to the Information Commissioner who referred the review to the Tribunal. By the time the matter was before the Tribunal, the Secretary only sought to deny access to six documents which are identified as those numbered 3, 10, 11, 22, 25 and 44(b).

12    The Documents have been provided to the Court alone on a confidential basis and were also provided to the Tribunal on that basis. Without revealing the content of the Documents, they broadly comprise notes, minutes and email correspondence relating to meetings and discussions between the Department and the Walker Group during the pre-referral process.

13    On 14 December 2021, the Tribunal published its reasons after conducting a de novo review, affirming the decision of the delegate to deny access to the six Documents. The Tribunal found that:

(a)    all six of the Documents (3, 10, 11, 22, 25 and 44(b)) were exempt from production pursuant to s 47E(d) and s 11A(5) of the FOI Act; and

(b)    Document 3 was also exempt from production pursuant to s 45(1) of the FOI Act.

14    The ACF now appeals that decision.

The Appeal

15    Section 44(1) of the AAT Act provides that a party may appeal a decision of the Tribunal to this Court “on a question of law”. ACF raised three grounds of appeal as follows:

1.    The Tribunal erred in law in its application of the exemption available under section 45(1) of the Freedom of Information Act 1982 (the Act).

2.    The Tribunal erred in law in its application of the conditional exemption under section 47E(d) of the Act.

3.    The Tribunal erred in law in its application of the test to be applied in determining whether or not it would be contrary to the public interest under 11A(5) of the Act to allow access to the relevant documents.

16    The four questions of law relied upon by the ACF are also set out in the ACF’s Amended Notice of Appeal. They are as follows:

(1)    Whether the Tribunal erred in failing to make the necessary findings to establish that there could have been an action for breach of confidence in accordance with the requirements of s 45(1) of the Act.

(2)    Whether the Tribunal erred in the construction of s 47E(d) as to the criteria to be satisfied for the exemption under s 47E(d) to apply.

(3)    Whether the Tribunal erred by failing to carry out an individual examination of the documents for the purposes of assessing the application of s 47E(d), the “public interest” test under the Act and s 45(1).

(4)    Whether the Tribunal erred by misapplying the statutory “public interest” test.

17    Question of law (1) engages ground 1 of the appeal, whilst questions of law (2) and (4) are directed to grounds 2 and 3. Question of law (3) relates to each of the three grounds of appeal. The grounds, as supplemented by the questions of law, nevertheless remain general and lack specification. It was, however, accepted that the particulars to those grounds could be found in the ACF’s written submissions, in particular at [2] of its reply submissions, which stated:

2.     The ACF’s appeal is not confined to a question as to whether some facts found were “capable of supporting” certain findings. Far from it: the ACF’s submissions identify these legal errors:

(a)     A legal error in the construction of s47E(d) as to the criteria to be satisfied to determine if that exception applies {see ACF’s submissions [26]-[30]};

(b)     A legal error caused by the failure to carry out an individual examination of the documents for the purpose of assessing the application of s47E(d), the “public interest” test and s45(1{ACF’s submissions [31], [42]-[43]};

(c)     A legal misapplication of the statutory “public interest” test so that the interest of the Department (and, even, property developers) was put ahead of the interest of the public {ACF’s submissions [35]-[37]};

(d)     A legal misinterpretation of the statutory “public interest” test by reversing how the test is to be applied in the context of a finding that production of the document would be “contrary to the public interest” {ACF’s submissions [38]}. There is an overlap between this and the previously identified error, but each stands as an example of how the AAT erred in the application of the public interest test;

(e)     A legal error in failing to make findings necessary to establish that there could have been an action for a breach of confidence in accordance with the requirements of s45(1) {ACF’s submissions [40]-[42]}.

18    The ACF has now been granted access to Document 25 as the Secretary has conceded that the Tribunal’s findings of fact do not support the conclusion that Document 25 is conditionally exempt by reason of s 47E(d) of the FOI Act. However, counsel for the ACF raised at the hearing that Document 25 remains in dispute because it was provided to the ACF in an edited form pursuant to s 22 and s 47F of the FOI Act and the ACF rejects access on that basis. In the circumstances, I will treat Document 25 as disputed.

Legislative framework – the FOI Act

19    The FOI Act is intended “to give members of the public rights of access to official documents of the Government of the Commonwealth and its agencies”. Section 11 creates a legally enforceable right for members of the public to obtain access to government documents other than “exempt” documents. There is a process set out in Pt III of the Act for persons to make requests for documents and for the agency to consider those requests and provide a response. Section 11A provides:

Mandatory access—general rule

(3)     The agency or Minister must give the person access to the document in accordance with this Act, subject to this section.

Exemptions and conditional exemptions

(4)     The agency or Minister is not required by this Act to give the person access to the document at a particular time if, at that time, the document is an exempt document.

Note: Access may be given to an exempt document apart from under this Act, whether or not in response to a request (see section 3A (objects—information or documents otherwise accessible)).

(5)     The agency or Minister must give the person access to the document if it is conditionally exempt at a particular time unless (in the circumstances) access to the document at that time would, on balance, be contrary to the public interest.

Note 1:     Division 3 of Part IV provides for when a document is conditionally exempt.

Note 2:     A conditionally exempt document is an exempt document if access to the document would, on balance, be contrary to the public interest (see section 31B (exempt documents for the purposes of Part IV)).

Note 3:     Section 11B deals with when it is contrary to the public interest to give a person access to the document.

(6)     Despite subsection (5), the agency or Minister is not required to give access to the document at a particular time if, at that time, the document is both:

(a)     a conditionally exempt document; and

(b)    an exempt document:

(i)     under Division 2 of Part IV (exemptions); or

(ii)     within the meaning of paragraph (b) or (c) of the definition of exempt document in subsection 4(1).

20    Exempt documents are addressed by Pt IV of the FOI Act which relevantly includes s 31B and s 45 which are in the following terms:

31B    Exempt documents for the purposes of this Part

A document is exempt for the purposes of this Part if:

(a)    it is an exempt document under Division 2; or

(b)    it is conditionally exempt under Division 3, and access to the document would, on balance, be contrary to the public interest for the purposes of subsection 11A(5).

Note 1:    A document is an exempt document for the purposes of this Act (see subsection 4(1)) if:

(a)    it is exempt under this section; or

(b)    it is exempt because of section 7 (exemption of certain persons and bodies); or

(c)    it is an official document of a Minister that contains matters not relating to the affairs of an agency or a Department of State.

Note 2:    Access must generally be given to a conditionally exempt document unless it would be contrary to the public interest (see section 11A).

45    Documents containing material obtained in confidence

(1)    A document is an exempt document if its disclosure under this Act would found an action, by a person (other than an agency or the Commonwealth), for breach of confidence.

(2)    Subsection (1) does not apply to a document to which subsection 47C(1) (deliberative processes) applies (or would apply, but for subsection 47C(2) or (3)), that is prepared by a Minister, a member of the staff of a Minister, or an officer or employee of an agency, in the course of his or her duties, or by a prescribed authority or Norfolk Island authority in the performance of its functions, for purposes relating to the affairs of an agency or a Department of State unless the disclosure of the document would constitute a breach of confidence owed to a person or body other than:

(a)    a person in the capacity of Minister, member of the staff of a Minister or officer of an agency; or

(b)    an agency or the Commonwealth.

21    Division 3 of Pt IV sets out documents that are “conditionally exempt” subject to the public interest test as provided for by s 31B(b). Relevantly, s 47E provides:

47E    Public interest conditional exemptions—certain operations of agencies

A document is conditionally exempt if its disclosure under this Act would, or could reasonably be expected to, do any of the following:

(a)    prejudice the effectiveness of procedures or methods for the conduct of tests, examinations or audits by an agency;

(b)    prejudice the attainment of the objects of particular tests, examinations or audits conducted or to be conducted by an agency;

(c)    have a substantial adverse effect on the management or assessment of personnel by the Commonwealth or by an agency;

(d)    have a substantial adverse effect on the proper and efficient conduct of the operations of an agency.

Note:    Access must generally be given to a conditionally exempt document unless it would be contrary to the public interest (see section 11A).

22    The agency or Minister has the onus of establishing that a document is exempt or conditionally exempt in any proceeding: s 61(1).

23    Finally, s 93A provides that the Information Commissioner may publish guidelines for the purposes of the FOI Act (FOI Guidelines) and regard must be had to those Guidelines, including by the Tribunal, when exercising any power or function under the Act.

Consideration

Exclusion of Document 3 under s 45(1)

24    Document 3 is an email prepared by the Department communicated to the Walker Group. It summarises some of the discussions between the Department and the Walker Group which occurred as part of the Department’s pre-referral process. It refers to both communications made by the Department to the Walker Group as well as communications made by the Walker Group to the Department in the course of that process.

25    The Tribunal found that Document 3 was excluded from disclosure by operation of s 45(1) of the FOI Act. As set out above, that provision provides that “[a] document is an exempt document if its disclosure under this Act would found an action, by a person (other than an agency or the Commonwealth), for breach of confidence”.

26    It was not disputed that, in applying s 45(1) of the FOI Act, the Tribunal identified the correct test for assessing whether a document would found an action for breach of confidence. That test was set out by Gummow J in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443:

It is now settled that in order to make out a case for protection in equity of allegedly confidential information, a plaintiff must satisfy certain criteria. The plaintiff: (i) must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question; and must also be able to show that (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge); (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence; and (iv) there is actual or threatened misuse of that information: Saltman Engineering Co Ltd v Campbell Engineering Co (1948) 65 RPC 203 at 215; [1963] 3 All ER 413n, at 415; The Commonwealth v John Fairfax and Sons Ltd (1980) 147 CLR 39 at 50-51; O'Brien v Komesaroff (1982) 150 CLR 310 at 326-328. It may also be necessary, as Megarry thought probably was the case (Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 48), and as Mason (as he then was) accepted in the Fairfax decision was the case (at least for confidences reposed within government), that unauthorised use would be to the detriment of the plaintiff.

27    As has been noted in numerous previous decisions of the Tribunal, the observations of Gummow J in Corrs Pavey is the “the appropriate test to be applied in section 45 [of the FOI Act] cases”: Telstra Australia Limited and Australian Competition and Consumer Commission [2000] AATA 71 (DP McMahon) at [12]; and Re Kamminga and Australian National University (1992) 26 ALD 585 at 592 (O’Connor P, Attwood and Julian MM).

28    The Tribunal set out at [10] the necessary elements (elements) for an action of breach of confidence from Corrs Pavey as follows:

(a)    the information must be identified with specificity;

(b)    it must have the necessary quality of confidentiality;

(c)    it must have been communicated and received on the basis of a mutual understanding of confidence;

(d)    it must have been disclosed or threatened to be disclosed, without authority; and

(e)    unauthorised disclosure of the information has or will cause detriment.

29    There is some uncertainty whether detriment in element (e) must be established because, as explained by the FOI Guidelines, “an equitable breach of confidence operates upon the conscience (to respect the confidence) and not on the basis of damage caused”. Nonetheless, the Guidelines advise that, “despite this uncertainty, it would be prudent to assume that establishing detriment is necessary” and both parties accepted in this case that detriment was a necessary element. I will therefore proceed on that basis.

30    The ACF challenged the Tribunal’s application of that test. Question of law (1) asserted that the Tribunal made a legal error “in failing to make the necessary findings to establish that there could have been an action for a breach of confidence in accordance with the requirements of s45(1) of the Act”. Although posed in these terms, when the submissions are taken into account, what becomes apparent is that the ACF essentially contended that the Tribunal failed to consider elements (a), (b), (d) and (e) and wrongly determined element (c).

31    The Tribunal’s discussion as to the application of the test is short and may conveniently be set out in full:

12.     Document 3 is a record of a pre-referral meeting on 26 April 2017. The question for the Tribunal, on the evidence, is whether the content of Document 3 was communicated and received on the basis of a mutual understanding of confidentiality as between the Department and Walker Group around the time of its creation and whether its disclosure now would found an action for breach of confidence. Relevant evidence was given by Andrew McNee, of the Department, by sworn affidavit dated 11 December 2020. Mr McNee also gave oral evidence and was cross examined.

13.     The Applicant points out that there were no documents or indications on the Department’s website stating that pre-referral meetings would always be treated as confidential and that Mr McNee had no specific awareness of there being any agreement with the proponent as to the confidentiality that should attach to Document 3. However, Mr McNee directly deposes as to the Department’s practice in respect of pre-referral stage discussion documents and their confidential status. His oral evidence was consistent with this, albeit only providing such confirmation during re-examination, during questioning by the Tribunal.

14.     The Tribunal accepts, on balance, Mr McNee’s consistent evidence as to the Department’s approach to confidentiality as provided in paragraphs [16] to [26] of his affidavit, and his evidence given orally during the hearing relevant to this. The Tribunal consequently accepts the Respondent’s submissions that the elements of breach of confidence are made out, as set out in paragraphs [50] to [52] of the Respondent’s Closing Submissions dated 23 April 2021. Such submissions are supported by the evidence. Accordingly, the Tribunal finds the elements of breach of confidence as set out in paragraph 10 above are established in respect of Document 3.

15.     The Tribunal is satisfied as to the confidential status of the content of Document 3 and that its release would found an action for breach of confidence based upon the evidence discussed above. The Tribunal therefore determines that the delegate’s decision was justified in respect of Document 3 and so finds. (Citations omitted.)

32    It is evident from that discussion that the Tribunal considered element (c) — whether Document 3 was communicated on the basis of a mutual understanding of confidence — but it is less clear whether the Tribunal properly engaged with elements (a), (b), (d) and (e). On the one hand, the Tribunal identified at [12] the issue it had to determine as being solely concerned with element (c). That identification by the Tribunal of the issue it needed to deal with suggests that the Tribunal only engaged with element (c). On the other hand, the Tribunal made findings in relation to each of the elements at the end of [14]. In so far as the Tribunal addressed those elements, at least by way of conclusion as expressed at [14], that seems to have been done solely by reference to the evidence of Mr McNee at [16]-[26] of his affidavit. By reason of that evidence, the Tribunal accepted the respondent’s submissions that each of the elements were made out.

33    Despite those conclusions at [14] apparently encompassing elements (a), (b), (d) and (e), the difficulty I have with accepting that elements (a) and (e) were considered is that the evidence which the Tribunal said it relied upon does not permit a proper consideration of those elements.

34    Turning then to that evidence, Mr McNee at [16]-[18] of his affidavit refers to Document 3 as comprising communications between the Department and the Walker Group, noting that it records issues raised in the “pre-referral stage” by which I understand him to mean what I have referred to as the “pre-referral process”.

35    From the end of [18] to [26] of his affidavit, Mr McNee essentially addressed the pre-referral process. That evidence is relevant to a consideration of element (c) and provides a foundation for the Tribunal’s conclusion that element (c) was satisfied.

36    However, element (a) is not addressed by Mr McNee’s evidence at all. No attempt is there made to identify with specificity the information in Document 3 the disclosure of which would found an action for breach of confidence. That needed to be done by the Tribunal. It could not have been done by the Tribunal by reference to Mr McNee’s evidence and does not appear to have been otherwise done by the Tribunal.

37    It may be that the Tribunal (and Mr McNee) proceeded on the basis that the disclosure of any of the information contained in Document 3 would found an action for breach of confidence. However, having examined the contents of Document 3 for myself, it is obvious that most of the information there recorded emanated from the Department and not from the Walker Group. That information could not possibly found an action for breach of confidence brought by a person other than the Commonwealth or an agency of the Commonwealth as contemplated by s 45(1). In those circumstances, the better view is that element (a) was simply not considered by the Tribunal.

38    Whether any information in Document 3 has “the necessary quality of confidentiality” in accordance with element (b) is not a matter expressly addressed by that part of Mr McNee’s evidence (at [16]-[26]) which was relied upon by the Tribunal. However, Mr McNee notes at [13]-[14] of his affidavit that the information in the Documents, including Document 3, is not in the public domain. He goes on to offer an opinion at [23] that “[n]otwithstanding the passing of time, I consider the information contained in document … #3 continue[s] to be confidential between the Department and Walker Group”. Mr McNee’s evidence that the information in Document 3 is not in the public domain is a sufficient basis for the Tribunal to be reasonably satisfied that Document 3 has the “necessary quality of confidentiality”: see, eg, Baueris v Commonwealth (1987) 75 ALR 327 at 329 (Beaumont J); FOI Guidelines at [5.162]. Although the Tribunal neither referred to, or expressed any reliance upon, that evidence, its existence provides some support for the conclusion that element (b) was considered by the Tribunal.

39    Element (d), that the information in Document 3 may be disclosed without authority, is not expressly addressed by Mr McNee. He does not, for example, give any evidence as to whether authority was given by the Walker Group for Document 3 (or any other Document) to be disclosed. Nonetheless, the Secretary made submissions to the Tribunal that no authority was given by the Walker Group to disclose any documents, without citing any evidence in support of that proposition. There was a reference in those submissions to [15] of Mr McNee’s affidavit, which is to the effect that the Walker Group was not consulted by the Department with respect to the ACF’s access request. It may be that the Secretary was here trying to have the Tribunal draw an inference that no authority had been given by the Walker Group because the Department had not consulted, and therefore had no opportunity to obtain the authority of, the Walker Group. However, the Tribunal did not identify whether that inference was, in fact, relied upon. Nevertheless, the existence of that material in the context of the submission made by the Secretary to the Tribunal provides some support for concluding that element (d) was considered by the Tribunal.

40    As to element (e), that disclosure of the information has or will cause detriment, Mr McNee does no more than provide a general opinion at [25] to the effect that disclosure of information communicated in the pre-referral process “may well cause detriment to the referring parties, by potentially giving an unfair advantage to any other parties who may wish to proceed with a similar project or referral idea, if access to such material could be obtained prior to the final referral being received and being made available for public comment”. Whether the information in Document 3 actually engaged that potential for detriment is not addressed. Furthermore, Mr McNee’s evidence (at [22]) is to the effect that the information in Document 3 is about a proposal in respect of which a referral application was subsequently made and in place at the time he made his affidavit. It therefore seems unlikely that the example of possible detriment to which Mr McNee referred was capable of eventuating in relation to the information in Document 3.

41    There was therefore no basis provided by Mr McNee upon which the Tribunal could have properly considered and determined whether element (e) was satisfied and there is no suggestion in the reasons of the Tribunal that element (e) was otherwise satisfied. As Davies, Wilcox and Einfeld JJ said in Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111 at 123 in the not dissimilar context of the application of the predecessor to what is now s 47(1)(b) of the FOI Act, which provided an exemption for “information having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed” :

In the application of s 43(1)(b), there would ordinarily be material before the decision-maker which would show whether or not the commercial value of the information would be or could be expected to be destroyed or diminished if the information were disclosed.

42    There being no material before the Tribunal capable of establishing that detriment would, in fact, flow from the disclosure of Document 3, there was no basis upon the Tribunal could have properly considered element (e).

43    For those reasons, I am of the view that the material put before the Tribunal did not provide a basis for the Tribunal to properly consider whether elements (a) and (e) were satisfied. In those circumstances, and where the Tribunal identified that the question for it to determine went only to element (c), the better view is that the Tribunal did not consider elements (a) and (e). A failure to consider, that is to “read, identify, understand and evaluate” (Plaintiff M1/2021 v Minister for Home Affairs (2022) 400 ALR 417 at [24] (Kiefel CJ, Keane, Gordon and Steward JJ)), a matter which s 45(1) required be considered, constitutes jurisdictional error and such an error is an error of law: Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 at [202] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ). Another way of expressing the legal error here identified is that it was not open for the Tribunal to find that elements (a) and (e) were satisfied.

44    In relation to element (c), I do not accept the ACF’s contention that the evidence before the Tribunal was not capable of giving rise to the conclusion that a mutual understanding of confidence existed. I accept that most of the evidence from Mr McNee addressed the pre-referral process in general, not the specific interactions between the Department and the Walker Group. However, Mr McNee gave evidence that the pre-referral process is “always confidential” and that all pre-referral conversations are entered into from the premise that they are confidential. Evidence that a certain practice conducted by the Department is always confidential is a sufficient basis to conclude that one instance of that practice is more likely than not to be confidential. The Tribunal’s finding with respect to element (c) was therefore reasonably open on the material before it.

45    The ACF also contended that no mutual understanding of confidence existed because, according to Mr McNee’s evidence in cross-examination, any assurance the Department gave as to the confidentiality of the pre-referral process was an assurance that was given subject to the operation of the FOI Act. The relevant statement of Mr McNee relied upon by the ACF is the following: “We’re also very clear that we can’t give an assurance from the Department’s perspective in terms of how we’ll treat that information [provided in the pre-referral process]”.

46    However, at best from the perspective of the ACF, all that Mr McNee was doing here was making the obvious point that confidentiality attaches to the communication but only in so far as the law permits, which must be taken as a given in relation to every exchange of a confidentiality undertaking. A mutual understanding of confidence, and obligations of confidentiality, cannot defeat a disclosure compelled by law. I therefore reject the ACF’s contention that the Tribunal failed to make findings that would have led it to conclude that no mutual understanding of confidentiality existed between the Department and the Walker Group in respect of the information in Document 3.

47    Nonetheless, for the reasons given above, I am satisfied that the Tribunal erred as contended for by ground 1.

Exclusion of the Documents under s 47E and s 11A(5)

48    In relation to Document 3, as well as each of the other Documents, the Tribunal concluded at [37]:

The Tribunal is satisfied that the Applicant’s application for access to the Documents should not be granted. The correct or preferable decision is that the Documents are conditionally exempt pursuant to s 47E(d) of the Act and it is not in the public interest that access to the Documents be granted at this time.

49    That determination required the Tribunal to make two separate but related findings in relation to each of the Documents. First, that the document was a conditionally exempt document because (in the terms of s 47E(d)), “its disclosure under [the FOI Act] would, or could reasonably be expected to … have a substantial adverse effect on the proper and efficient conduct of the operations of an agency”. Second, that, in the application of s 31B(b) and in the terms of s 11A(5), access to the document “(in the circumstances) … would, on balance, be contrary to the public interest”.

50    Those two issues are, of course, related and there are findings made about the pre-referral process by the Tribunal which were relevant to both. In addressing the s 47E(d) question as to whether the Documents were conditionally exempt documents, the Tribunal said this at [25]:

The confidential pre-referral process serves a distinct and useful purpose which is beneficial to the efficient conduct of the Department’s operations. Its confidential status enables referring parties to be less guarded and to be more willing to take part in such meetings. The Tribunal finds that it is reasonable to expect that without such pre-referral information being provided, the Department’s decision-making process would become more complex and burdensome, as any such referrals may not contain as extensive or necessary information, or adequately address any of the preliminary indications or advice that would have been otherwise provided to an applicant by the Department during that per-referral [sic] stage. The advantages of narrowing issues and eliminating issues occasioned by the pre-referral process would be seriously undermined if the confidential nature of such a process was dissolved. Further, if access to the Documents was granted, referring parties would be unlikely in the future to disclose sensitive and commercial in confidential [sic] information and consequently, the Department would be unlikely to provide preliminary advice which would otherwise assist in the efficient formation of any formal application received pursuant to the EPBC Act. The evidence of Mr McNee supports such findings.

51    Further, in addressing the s 11A(5) question as to whether disclosure would be contrary to the public interest, the Tribunal said this at [35]:

By reason of the evidence discussed above, the Tribunal finds that there is a significant risk that individuals would reasonably be expected to be discouraged from disclosing ideas or discussions that were ultimately not canvassed in a final referral application. The Tribunal is satisfied that the disclosure of the Documents could reasonably be expected to prejudice the Department’s:

(a)    ability to obtain confidential information;

(b)    ability to obtain similar information in the future; and

(c)    management function.

52    Those observations reveal the basis for the Tribunal’s satisfaction that disclosure of the Documents:

(1)    Could reasonably be expected to have a substantial adverse effect on the proper and efficient conduct of the operations of the Department; and

(2)    Would be contrary to the public interest.

53    The basis given by the Tribunal is, essentially, that the disclosure of the Documents would harm the Department’s operations because, if such documents were disclosed, that may raise the potential that confidential information provided by referring parties in the pre-referral process in the future may similarly be disclosed which would lead to diminished participation by referring parties in that process. That was said to be so because referring parties would not “disclose sensitive and commercial in-confidence information” or “confidential information … or similar information” if they thought that there was a potential for such documents to later be publicly disclosed, thus diminishing the utility of that process for the operations of the Department.

54    Before identifying the nature of the legal errors that I consider are ultimately disclosed by the approach taken by the Tribunal, it is convenient to make some preliminary observations.

55    First, the Tribunal’s reasoning seems to proceed on the premise that the disclosure of confidential information under the FOI Act will lead to the future non-disclosure of confidential information by referring parties involved in the pre-referral process. That generalised reasoning may well be cogent if what is in issue is the disclosure of confidential information which accords with the criteria provided for by s 45(1) and, in particular, where the disclosure would involve disclosure of information of a referring party that would cause detriment to that party. However, it is far less cogent to assume that the disclosure of information which is not information of a referring party and would not result in detriment to a referring party would lead to the feared future non-disclosure at the heart of the Tribunal’s finding of substantial prejudice to the operations of the Department.

56    The Tribunal described at [21] the Documents as comprising “notes, documents, minutes and correspondence relating to meetings and discussions between the Department and the Walker Group during the pre-referral part of the … application process and records of subsequent decision-making processes once the formal application was made”. The Tribunal stated at [24] that, on the evidence before it, the information contained in the Documents “remains confidential and has not been made publicly available to date”.

57    However, the information that the Tribunal characterised as confidential was not defined as confidential by reference to s 45(1). It was not confined to information obtained by the Department from others but seems to include the Department’s own information. So much is clear not only from an examination of the Documents themselves but also from Mr McNee’s evidence (at [39]) that pre-referral communications recorded in the Documents included “the Department’s pre-referral thought and consultation process”. For example, all of the Documents contain information, often expressed in standalone dot points in an email or memo, that only relate to the Department’s operations and which could not be considered the information of, let alone the confidential information of, the Walker Group. Further, whether disclosure of information exchanged in the pre-referral process would cause detriment to a referring party seems to have been either assumed by the Tribunal or simply formed no part of its characterisation of such information as being confidential information.

58    The Tribunal seems to have proceeded on the basis that, so long as the information was not in the public domain, all of the information in the Documents was confidential and that all of the information relating to a pre-referral process is confidential, merely because the communications related to a pre-referral process designated to be confidential by the agreement of the Department and referring parties.

59    Second, the evidentiary basis for the Tribunal’s reasoning that the disclosure of confidential information would lead to the future non-disclosure of such information was Mr McNee’s evidence. Mr McNee’s evidence was no more than his own unsubstantiated opinion as to how referring parties may respond to the disclosure of confidential information. It was more in the nature of speculation. It is highly generalised and unsupported by facts which could properly ground the opinion expressed. In any event, Mr McNee’s opinion that “referring applicants will often disclose sensitive or commercial-in-confidence material” and “would be hesitant to fully engage with the Department in pre-referral type discussions should they understand that any such records would later be disclosed” was proffered in relation to whether Document 3 contained confidential information meeting the criteria in s 45(1), not in relation to s 47E(d). Mr McNee’s evidence given in support of the Documents being exempt under s 47E(d) was that disclosure would (i) cause unnecessary work for the Department; (ii) negatively impact upon the Department’s capacity to develop and finalise its policy positions; and (iii) negatively impact upon the Department’s capacity to consider international issues. Although the Tribunal made reference to (i), noting that without the pre-referral process “the Department’s decision-making process would become more complex and burdensome”, it made no reference to (ii) or (iii) and instead largely adopted what was said by Mr McNee in relation to the effect of the disclosure of Document 3 under s 45(1), as though it had been relied upon by Mr McNee to support a conditional exemption under s 47E(d) for all of the Documents.

60    Third, the existence of s 45(1) and the protection it provides to the referring parties appears not to have been taken into account with respect to whether the Documents, other than Document 3, are conditionally exempt under s 47E(d). Namely, as information that is confidential is protected from disclosure by s 45(1), at least in relation to information the disclosure of which would found an action for breach of confidence, it could be reasonably expected that referring parties will not be discouraged from disclosing such information because of the protection provided by s 45(1).

61    On the reasoning adopted by the Tribunal, s 47E(d) provides an extremely broad scope to exempt documents from disclosure, including because it would cover the information of a Commonwealth agency and not merely information obtained by such an agency from others and would also exempt documents the disclosure of which would not cause detriment to the referring party. The scope of s 47E(d) would be obviously broader than s 45(1) and also broader than s 47G(1)(b) which deals with the conditional exemption conferred upon business information, the disclosure of which could reasonably be expected to prejudice the future supply of information to the Commonwealth. A construction of s 47E(d) that concluded that little more than the agreement of a government agency to keep its dealings with private interests confidential can be the basis for an exemption from disclosure would substantially extend the reach of that provision.

62    Recognising the potential broad application of s 47E(d) on the reasoning of the Tribunal, gives some resonance to the alarm bells rung by the ACF in its submissions that “[t]he days when governmental decision-making could - by some ‘accepted practice’ or agreement - be kept away from public scrutiny are long gone” (Emphasis in original.). That observation reflects the following observation made by Davies, Wilcox and Einfeld JJ in Searle at 127:

Prior to the coming into operation of the FOI Act, most communications to Commonwealth departments were understood to be confidential because access to the material could be obtained only at the discretion of an appropriate officer. With the commencement of the FOI Act on 1 December 1982, not only could there be no understanding of absolute confidentiality, access became enforceable, subject to the provisions of the FOI Act. No officer could avoid the provisions of the FOI Act simply by agreeing to keep documents confidential. The FOI Act provided otherwise.

63    On the reasoning adopted by the Tribunal, the FOI Act’s objective of giving “the Australian community access to information held by the Government of the Commonwealth” and its agencies (s 3(1)) could be readily defeated by government and private interests agreeing to treat and keep their dealings confidential.

64    That prospect suggests that some caution must be applied in construing s 47E(d), which is not to say that the exemptions contained in the FOI Act should be narrowly construed, but it is to say that the exemptions provided for are “to be interpreted according to the words used, bearing in mind the stated object of the Act”: News Corporation Ltd v National Companies and Securities Commission (1984) 1 FCR 64 at 66 (Bowen CJ and Fisher J); and Searle at 114-115 (Davies, Wilcox and Einfeld JJ).

65    In my view, the first legal error made by the Tribunal was its misconstruction of the phrase in s 47E “could reasonably be expected to”. Although the error was not elaborated upon by the submissions of the ACF to any great extent, that error was raised by ground 2 and question of law (2). The ACF contended that the words “could reasonably be expected to” convey something more than an outcome – of a “substantial adverse effect on the proper and efficient conduct of the operations of an agency” – that “could” be expected. I agree.

66    In assessing whether the Documents were exempt under s 47E(d), the Tribunal at [18] construed the task required of it by the phrase “would or could be reasonably expected to” in s 47E as follows:

The Tribunal must have logical or probative material before it which reasonably permits an inference that there is a probability (would) or a possibility (could) of the risk resulting from disclosure. (Citation omitted.) (Emphasis added.)

67    In other words, and in terms of whether the Documents could reasonably be expected to have a substantial adverse effect on the proper and efficient conduct of the operations of the Department, the Tribunal saw its task as determining whether the material before it reasonably permits an inference that there is a possibility that the disclosure of the Documents will result in the relevant substantial adverse effect. The test posed by the Tribunal is erroneous. It is not supported by Re Diamond and Chief Executive Officer of the Australian Curriculum, Assessment and Reporting Authority [2014] AATA 707 at [100]-[101] which was relied upon by the Tribunal at [18] of its reasons.

68    In fact, at [100] of Re Diamond, DP Forgie and Taglieri M sought to draw a distinction between the ordinary meaning of “could”, which may be used to “express a possibility”, and the qualification of the word “could” provided by the words “reasonably be expected to”. Furthermore, at [101] of Re Diamond, the Tribunal quoted the following passage from the judgment of Bowen CJ and Beaumont J in Attorney-General’s Department v Cockcroft (1986) 10 FCR 180 at 190 where their Honours construed the same phrase in the predecessor provision to the current s 47G(1)(b) of the FOI Act:

In our opinion, in the present context, the words “could reasonably be expected to prejudice the future supply of information” were intended to receive their ordinary meaning. That is to say, they require a judgment to be made by the decision-maker as to whether it is reasonable, as distinct from something that is irrational, absurd or ridiculous, to expect that those who would otherwise supply information of the prescribed kind to the Commonwealth or any agency would decline to do so if the document in question were disclosed under the Act. It is undesirable to attempt any paraphrase of these words. In particular, it is undesirable to consider the operation of the provision in terms of probabilities or possibilities or the like. To construe s 43(1)(c)(ii) as depending in its application upon the occurrence of certain events in terms of any specific degree of likelihood or probability is, in our view, to place an unwarranted gloss upon the relatively plain words of the Act. It is preferable to confine the inquiry to whether the expectation claimed was reasonably based: see Kioa v West (1985) 60 ALJR 113 per Mason J and per Gibbs CJ.

69    As was there expressly stated, “it is undesirable to consider the operation of the provision in terms of probabilities or possibilities or the like”. The relevant enquiry is “whether the expectation claimed was reasonably based”.

70    Furthermore, in Searle, the Full Court, referring to the passage from Cockcroft just cited, specifically said this at 123:

Their Honours did not suggest, as was submitted by Mr Bayne, that it was sufficient that there be a possibility not irrational, absurd or ridiculous that the specified consequence would occur. Their Honours specifically rejected that approach, saying that the words “could reasonably be expected” meant what they said. The practical application of their Honours’ view will not necessarily lead to a result different from that proposed by Sheppard J. (Emphasis in original.)

71    The Full Court’s reference to the approach proposed by Sheppard J in Cockcroft and its consistency with that of the majority, requires that the approach of Sheppard J also be here elucidated. Relevantly, Sheppard J said at 195 that it was clear that a reasonable expectation of an event occurring “required more than a possibility, risk or chance of the event occurring”. Furthermore, his Honour said this at 195-196:

The words are expressed in the passive voice – “could reasonably be expected”. What is required is that the decision-maker act reasonably. For the document to be exempt his conduct must be taken to be that of the reasonable man. But then comes the difficulty. So acting, the decision-maker must expect that disclosure of the document could prejudice the future supply of information. In my opinion he will not be justified in claiming exemption unless, at the time the decision is made, he has real and substantial grounds for thinking that the production of the document could prejudice that supply. But, stringent though that test may be, it does not go so far as to require the decision-maker to be satisfied upon a balance of probabilities that the production of the document will in fact prejudice the future supply of information.

72    The conclusion of the Tribunal is variously expressed as being that disclosure “could reasonably be expected” (at [26]) or “could have” (at [27]) led to a substantial adverse effect. However, having misstated the applicable statutory test and there being no express consideration in the Tribunal’s reasons as to whether the expectation claimed was, in fact, reasonably based, I consider that the better view is that the Tribunal was satisfied of no more than that there was a possibility that disclosure of the Documents would result in a substantial adverse effect on the proper and efficient conduct of the operations of the Department.

73    That conclusion is supported by my own view that the material before the Tribunal, at best, only substantiated the possibility that disclosure of the Documents would result in a substantial adverse effect on the proper and efficient conduct of the operations of the Department. There is not a reasonable basis provided by the material for concluding that the disclosure of the information of the Department in the Documents could reasonably be expected to have that effect. The flawed reasoning to which I have referred at [55]-[59] is relevant. Furthermore, whether there is a reasonable basis for an expectation that disclosure of information of a referring party, which is only confidential because of an agreement with the Department that it be treated as confidential, would result in referring parties not being prepared to provide the Department with information of that kind required an assessment of a range of matters not assessed or assessable on the material before the Tribunal. For instance, it required assessing the advantages and potential benefits for referring parties of fully participating in the pre-referral process and, in the context of such advantages or benefits, whether referring parties would nonetheless be prepared to fully participate despite the risk that, at some later time in the future, information provided may be disclosed consequent upon an FOI application. Mr McNee asserts at [20]-[21] and [29] of his affidavit that there are such benefits to referring parties, but none of that was considered by the Tribunal.

74    Further still, the risk of diminished participation would also depend upon the extent to which the information conveyed and at risk of disclosure would be detrimental to the interests of the referring party. Putting Document 3 to one side, if the information in the Documents provided by the Walker Group during the pre-referral process is regarded as typical of the information provided by referring parties, it is far from obvious to me that the disclosure of such information would be of any detriment at all to a referring party. It must also be appreciated that if disclosure would result in detriment, s 45(1) would likely render information received from a referring party in the pre-referral process exempt under the FOI Act, and it does not therefore follow that the disclosure of the Documents would diminish the willingness of referring parties to provide information, the disclosure of which would be denied by s 45(1).

75    For all those reasons, but with one reservation to which I will come, I take the view that the Tribunal’s decision is affected by legal error in determining that the Documents are conditionally exempt under s 47E(d). That error is based on the Tribunal’s misconception of the test it was required to apply by reference to the phrase “could reasonably be expected to” in s 47E.

76    My reservation in relying upon that conclusion to found error is that, whilst the error I have identified was raised in broad terms by the ACF, it was not sufficiently elaborated upon by the submissions made by the ACF and certainly not in the manner I have done above. The Secretary’s submissions did not, understandably, grapple with the issues of construction or much of the reasoning detailed above.

77    Those submissions did, however, apprehend that the ACF was contending that it was not open to the Tribunal, on the basis of the factual findings it made, to conclude that disclosure of the Documents “could reasonably be expected to … have a substantial adverse effect on the proper and efficient conduct of the operation of an agency” within the meaning of s 47E(d). The Secretary had an opportunity to grapple with that contention and did so.

78    Once it is appreciated that the facts must support a reasonable basis for the expectation in question, rather than merely a possibility of the adverse effect, for the reasons expressed above, I think the ACF was correct to contend that the conclusion reached by the Tribunal was not open and the Secretary was wrong to contend that it was. The Tribunal’s second error, that the material before it was not capable of satisfying the statutory phrase “could reasonably be expected to … have a substantial and adverse effect”, was also an error of law: Haritos at [196] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ). On that asserted error, neither the ACF nor the Secretary elaborated upon the proper construction of the statutory phrase in question.

79    In the end, with some reservation, I have determined that the absence of elaboration by the ACF on the critical issue of construction ought not preclude me from making either of the findings of legal error described above.

80    Due to the close nexus between the Tribunal’s reasoning that the Documents were conditionally exempt under s 47E(d) and its reasoning that disclosure was not contrary to the public interest under s 11A(5), the errors I have identified with respect to the conditional exemption in s 47E(d) inevitably taint with error the conclusion reached by the Tribunal on the public interest assessment with respect to s 11A(5). I therefore accept that appeal grounds 2 and 3 are made out.

81    It is unnecessary for me to determine whether the other errors asserted by the ACF are established.

Conclusion

82    I have determined that the appeal should be allowed in respect of each of the grounds agitated. The Tribunal’s decision should be set aside in so far as the Tribunal affirmed the delegate’s decision in respect of the Documents.

83    The parties disagreed whether I should: (i) remit the matter to the Tribunal pursuant to s 44(5) of the AAT Act to re-determine according to law; or (ii) determine the matter for myself.

84    The Secretary contended that there were other bases for exemptions that the Secretary relied upon but the Tribunal did not deal with, bases which were not argued before me.

85    In these circumstances, the appropriate course is to remit the matter to be decided again, including on the additional bases relied upon by the Secretary that were not considered by the Tribunal. I will make orders to that effect.

86    Although costs should ordinarily follow the event, that is, the successful party should have its costs paid for by the losing party, there may be reasons why such an order should not be made. The Secretary should be given an opportunity to consider these reasons and, if the Secretary wishes, make submissions that the usual order as to costs ought not be made. For that reason, I will make an order that unless the Secretary files and serves a submission within seven days contending that an order should not be made that the Secretary pay the costs of the ACF, the Secretary pay those costs. If such a submission is made, a responding submission should be filed and served by the ACF within seven days. I will then determine the question of costs on the papers.

Associate:

Dated:    24 August 2023