Case 030624. Request for access to records relating to the tax settlement between Mr Charles Haughey and the Revenue Commissioners

Whether records created during the course of negotiations of a tax settlement can relate to the business or proceedings of a tribunal - section 22(1A) - relevant factors when reviewing discretionary element of an exemption - section 22(1A) - whether information supplied during the course of a tax settlement can be subject to a duty of confidence - section 26(1)(b) - whether disclosure would prejudice the effectiveness of inquiries carried out by the Revenue - section 21(1)(a) - whether disclosure could prejudice the enforcement or compliance with the tax law - section 23(1)(a)(ii) - whether there is a stronger public interest in disclosure of personal information of former public representatives

Case Summary

Date of Decision: 11.08.2005

Our Reference: 030624

11.08.2005

The Sunday Times 4th Floor Bishop's Square Redmond's Hill Dublin 2

Dear Sir

I refer to your application under the Freedom of Information Acts, 1997 and 2003, for review of the decision of the Office of the Revenue Commissioners ("the Revenue") to refuse access to certain records relating to the tax settlement involving Mr Charles Haughey. At the outset I wish to apologise for the delay in dealing with your application and to thank you for your co-operation during the course of this review.

Background

I have now completed my review of the Revenue's decision which was carried out in accordance with the provisions of the Freedom of Information (FOI) Act, 1997, as amended by the Freedom of Information (Amendment) Act, 2003. Accordingly, all references in this letter to particular sections of the FOI Act, except where otherwise stated, refer to the 1997 FOI Act as amended. In carrying out my review, I have had regard to your submission to this Office dated 26 January 2005. I have also had regard to the submissions of the Revenue dated 18 July 2003 and 19 November 2004, and I have examined the records to which you were refused access.

I note that on 20 January 2005 your were notified of the preliminary view of my Office that the Revenue was justified in refusing access to the records within the scope of my review. In your response dated 26 January 2005 you indicated that you wished to have a decision on the matter and made some further comments in support of your contention that access should be granted. Accordingly, I have taken account of your comments and I have now decided to conclude my review by issuing a binding decision. In summary, I have decided to affirm the decision of the Revenue to refuse access to the records sought.

I note that in your response you refer to your frustration at the Revenue's decision to refuse your request at the initial decision making stage and internal review stage by using different exemptions. The Revenue's initial decision is set out in its two letters to you dated 6 and 7 May 2003. Its decision following internal review is dated 26 May 2003. In all three letters the Revenue has claimed that both section 28(1) (personal information) and section 22(1)(a) (legal professional privilege) apply. It is true to say that during the course of this review the Revenue raised a number of additional exemptions in its submissions, including section 22(1A) (records relating to a tribunal). However, my reviews of decisions of public bodies are de novo. That is, I review the decision of public bodies in light of the circumstances and the law as they pertain at the time of my decision. This view is supported by the 2001 High Court Judgement in the case of The Minister for Education and Science v the Information Commissioner where Justice O'Caoimh stated:

"... it is clear that the decision that was to be made by the Information Commissioner in light of the appeals taken to him was to be made in light of the facts and circumstances applying at the date of the review by him and not those facts and circumstances pertaining on the date of the original decision."

This was partly the reason my Office wrote to you offering you an opportunity to comment on the additional exemptions claimed by the Revenue. Of course, I appreciate that like most applicants for review your ability to make a detailed argument is hampered by the lack of access to the records concerned. However, it should be noted that where a public body refuses access to records under the FOI Act, then in any subsequent review by me that refusal is presumed not to have been justified unless the public body satisfies me to the contrary (section 34(12)(b) of the FOI Act).

Scope of Review

Due to the large number of records which fell within the scope of your original request to the Revenue, you agreed to confine my review to a sample of those records without prejudice to seeking access to the remaining records at some future point. On 4 October 2004, my Office wrote to the Revenue setting out the view that access could be granted to a small number of these records, i.e. those records listed in Appendix II to that letter. These were records which were trivial or routine in nature and whose disclosure would not have resulted in any harm to the Revenue or Mr Haughey. During a subsequent meeting with the Revenue you indicated that you were not interested in seeking access to: (i) trite or innocuous records, (ii) inter-office e mails and memoranda that did not relate to or add significantly to the understanding of the settlement, (iii) copies of records, (iv) records that contained information that was already in the public domain, or (v) various drafts of records including the Press Release. I also understand that you identified twelve 'core' records to which the Revenue continued to refuse access and which you wanted my review to focus on. I have referred to these records as records "C1" to "C12" for the purpose of explaining my decision. In a subsequent telephone discussion with staff of my Office you also indicated that you were not interested in seeking access to the records listed in Appendix II to the letter of 4 October 2004.

My review is concerned solely with whether the decision of the Revenue to refuse access to the twelve 'core' records together with the remaining records identified by you as part of a sample of records (with the exception of any records that fall within (i) to (v) above and those records listed in Appendix II to the letter of 4 October 2004), is justified. This amounts to 144 records comprising of approximately 576 pages. The records range in date from July 2001 to April 2003. Again, without prejudice to your seeking access to the remaining records I am happy that the records before me in this review comprise information relating to very substantial matters that arose in the context of the Revenue's investigation and subsequent negotiations between the parties. For ease of reference I have scheduled the records involved in the attached appendix. This schedule also acts as a summary of my decision.

Description of records

Before I set out my findings I believe it would be useful to give a general description of the records which fall within the scope of my review. The twelve 'core' records can be described as follows:

Record C1: Internal e mail dated 25 July 2001 to Deputy Revenue Solicitor

(record 9 on file CJH/Phase II Jan-Oct 2001)

This is an internal e mail from a Revenue official to the Deputy Revenue Solicitor seeking legal advice. The e mail was prepared in advance of a meeting to be held with the Chairman of the Revenue Commissioners regarding what Revenue's "next steps" should be in relation to Mr Haughey's tax affairs. It seeks legal advice on the various options open to Revenue at that point in time.

Record C2: Briefing note on sequence of events in late February 2003

(record 51 on file CJH/Phase II Jan-April 2003)

Record C2 is a note prepared on 6 March 2003 recording developments in Mr Haughey's case between 20 February 2003 and 28 February 2003. The contents of the note refer to information received from Mr Haughey's agents during the settlement discussions and to legal advice received from the Deputy Revenue Solicitor. The record also outlines Revenue's approach to the case and options open to the Revenue at the time.

Record C3: Memorandum dated 28 February 2002 from the Chief Inspector of Taxes

(record 2 on file CJH/IB/Phase II)

The memorandum addressed to the Chairman of the Revenue Commissioners outlines and analyses Revenue's options as regards raising tax assessments on Mr Haughey. The record puts forward the advantages and disadvantages of each of the options and also makes reference to legal advice obtained in relation to the assessments.

Record C4: Memorandum dated 6 March 2002 from the Assistant Secretary, Capital Taxes

(record 3 on file CJH/IB/Phase II)

This record was prepared by the Assistant Secretary of Capital Taxes Division at the request of the Chairman of the Revenue Commissioners. It sets out the views of Capital Taxes Division on the prospects of making certain tax assessments "stand up". The note also puts forward arguments for assessing the payments to tax under a particular provision of the tax acts and recommends a strategy to move the case forward.

Record C5:

Memorandum dated 20 September 2002 from the Assistant Secretary, Capital Taxes Division

(record 8 on file CJH/IB/Phase II)

This memorandum outlines the Revenue's negotiating strategy prior to entering detailed negotiations with Mr Haughey's agents. It provides details of Mr Haughey's outstanding liabilities and includes tables setting out various tax and interest calculations depending on the expenditure base being used. The note also sets out the basis on which the calculations were made and the assumptions underlying them. The note was prepared for the board of the Revenue and seeks its approval for the proposed strategy.

Record C6: Memorandum relating to the settlement discussions (undated)

(record 10 on file CJH/IB/Phase II)

This record is a detailed memorandum prepared by a Revenue official listing issues for consideration by the board of the Revenue Commissioners in order to "move ahead" with the settlement negotiations. The note contains references to how the Revenue approach such negotiations. The note also contains information supplied by Mr Haughey's agents during the negotiations and information which was included in the final settlement agreement.

Record C7: Revenue note regarding penalties and publication issues (undated)

(record 1 on file 4341A)

This undated note considers the possible penalties that may be applied and publication of details of the settlement. The record contains information relating to Mr Haughey's tax affairs and outlines Revenue's approach to the negotiations.

Records C8 and C9: Notes of telephone calls of 5 October 2002 and 7 March 2003 between Revenue and Mr Haughey's agents

(records 9 and 29 on file 12784/88 part 2)

These notes contain information relating to Mr Haughey's financial affairs including information supplied by Mr Haughey's agents during the settlement negotiations. The notes also make reference to Revenue's strategy and approach to the settlement negotiations.

Record C10 and C11: Minutes of meetings of 20 November 2002 and 21 January 2003 between Revenue and Mr Haughey's agents

(records 38A and 40A on file 12784/88 part 2)

The minutes of the meeting contain detailed information relating to Mr Haughey's financial affairs supplied to the Revenue in the context of the settlement negotiations. The minutes also include references to Revenue's strategy and approach to the settlement discussions.

Record C12: Internal memorandum dated 3 July 2001

(record 6A on file CJH/Phase II Jan - Oct 2001)

The note lists and assesses various courses of action open to Revenue in pursuing Mr Haughey's tax affairs following revelations at the Moriarty Tribunal. The note contains much information relating to Mr Haughey's financial affairs.

The remaining records can be divided into seven groups:

1. Drafts and the final version of the Settlement Agreement

These records consist of the drafts and final version of the agreement concluded between Mr Haughey and the Revenue on 18 March 2003 in settlement of his tax affairs.

2. Internal Revenue documentation regarding its approach to the settlement

These records provide details of the Revenue's approach to the tax settlement including its evaluation of various options open to it in its dealings with Mr Haughey and assessment of other issues which arose during the course of the settlement discussions.

3. Notes of discussions with Mr Haughey's agents

These are records created by the Revenue of telephone and other discussions with Mr Haughey's agents during the course of the settlement negotiations. The notes contain information relating to Mr Haughey such as details of his income, expenditure, bank accounts, property, etc. They also contain details regarding the progress of the settlement discussions.

4. Minutes of meetings between the Revenue and Mr Haughey's agents

Again, these records contain details of Mr Haughey's income and expenditure, etc. supplied by Mr Haughey's agents during the course of the settlement discussions. They also contain Mr Haughey's detailed response to queries put to him by the Revenue regarding his financial affairs.

5. Correspondence between the Revenue and Mr Haughey's agents

The correspondence includes copies of Bank Account Certificates sought by the Revenue and further documentation regarding Mr Haughey's financial affairs.

6. Details of Mr Haughey's Income and Expenditure

This group of records consists mainly of spreadsheets prepared by the Revenue estimating Mr Haughey's income and expenditure over the relevant years. They also include details of tax payments made by Mr Haughey and include figures and information supplied by Mr Haughey and his agents during the settlement discussions.

7. Legal Advice

During the course of the settlement discussions the Revenue sought legal advice from the Revenue Solicitor regarding certain taxation matters and other issues related to the settlement discussions. The records also include briefing notes prepared for Revenue's legal representatives.

Findings

I wish to point out that while I am required by section 34(10) of the FOI Act to give reasons for my decisions, this is subject to the requirement of section 43 that I take all reasonable precautions to prevent disclosure of information contained in an exempt record during the course of a review.

The Revenue has claimed that the following sections of the FOI Act apply in various combinations to the records within the scope of my review. In reviewing the Revenue's claim I have addressed the question of access to each record or group of records in their entirety. I have done this in light of section 13(2) of the Act which states that a portion of a record should not be released if it is misleading and in light of your stated view that you do not require access to material described at (i) to (v) in the section of this decision headed "Scope of Review". While it would be open to me to direct access to parts of records I do not consider it sensible in the circumstances of this case.

Section 22(1)(a)

Section 22(1)(a) provides that a request shall be refused if the record concerned:

"would be exempt from production in proceedings in a court on the ground of legal professional privilege,".

Legal professional privilege enables the client to maintain the confidentiality of two types of communication:

confidential communications made between the client and his/her professional legal adviser for the purpose of obtaining and/or giving legal advice, and

confidential communications made between the client and a professional legal adviser or the professional legal adviser and a third party or between the client and a third party, the dominant purpose of which is the preparation for contemplated/pending litigation.

Having examined the records I am satisfied that legal professional privilege attaches to record C1 and the 16 records described in Group 7 above. These records consist of correspondence between Revenue officials and the Revenue solicitor seeking and receiving legal advice regarding the approach to the settlement discussions, and notes of meetings with, or briefing notes prepared for, Revenue's legal counsel. Furthermore, parts of other records quote this legal advice or the views of the Revenue's legal advisers. All of these records would be exempt from disclosure under section 22(1)(a).

Section 26(1)(b)

Section 26(1)(b) of the FOI Act provides that a request for access to a record shall be refused if:

"disclosure of the information concerned would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment ...or otherwise by law".

The Revenue claims that section 26(1)(b) applies to correspondence received from Mr Haughey's agents and records created by staff of the Revenue itself which contain information received from Mr Haughey's agents. While section 26(2) provides that section 26(1) shall not apply to these latter records, this is not the case where disclosure of such information would constitute a breach of a duty of confidence. Furthermore, such a duty of confidence must be owed by the Revenue to a person other than a member of its staff. In this case, I have considered whether or not an equitable duty of confidence exists (that is a "duty of confidence...provided for...by law") which was owed by the Revenue to Mr Haughey or any of his representatives.

The correct tests to apply in deciding whether there is a breach of an equitable duty of confidence are set out in the case of Coco v. A. N. Clark (Engineers) Limited F.S. R. 415 (which is accepted as reflecting the Irish law on the subject - see, for example, House of Spring Gardens Limited v. Point Blank Limited [1984] I.R 611) in which Megarry, J. stated as follows:

'Three elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself...must have the necessary quality of confidence about it. Secondly, that information must have been imparted in circumstances imposing an obligation of confidence. Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it.

Having examined the records, I am satisfied that the information contained in the records concerned as it is with Mr Haughey's income, expenditure, bank accounts and property, etc. has the necessary quality of confidence about it. I note that the information was supplied by Mr Haughey and his representatives during the course of negotiations on a possible settlement. In past decisions my predecessor as Information Commissioner, Mr Kevin Murphy, has accepted that any person who approaches the Revenue in the course of discussions on their tax affairs does so in the knowledge and expectation that information it supplies will be treated in strict confidence (see Case No 98042 - Sunday Times and the Revenue Commissioners, 8 July 1999, section 26(1)(a), available on www.oic.ie). I concur with such a view. Therefore, I am satisfied that the circumstances in which the information was given to the Revenue imposes an obligation of confidence on the Revenue. Release of the records would clearly be an unauthorised use of that information, which I would consider to be to the detriment of Mr Haughey. Thus, I find that disclosure of the information contained in these records would constitute a breach of an equitable duty of confidence owed by the Revenue to Mr Haughey.

I should acknowledge that given Mr Haughey's profile and the public hearings of the Moriarty and McCracken Tribunals there may be a small amount of information in the records that is already in the public domain. As such it could not be regarded as having the necessary quality of confidence. However, I do not consider it useful to attempt to examine each record with a view to establishing what information in each record has been disclosed to the world at large. Such an exercise would, obviously, only result in the granting of access to information that is already known to the public.

It is my view that the Revenue is justified in refusing you access to the following records or parts of records under the provisions of section 26(1)(b) of the FOI Act. These are records or parts of records that refer to Mr Haughey's income, expenditure, bank accounts and property, etc:

Parts of the draft and final version of the Settlement Agreement

Parts of internal Revenue documentation regarding the approach to the settlement, (including C2 and C6 )

Notes of discussions with Mr Haughey's agents (including C8 and C9)

Minutes of meetings between the Revenue and Mr Haughey's agents (including C10 and C11)

Correspondence between the Revenue and Mr Haughey's agents

Parts of the schedules of Mr Haughey's income and expenditure

The public interest balancing test as set out at section 26(3) of the FOI Act does not apply to section 26(1)(b). However, an action for breach of confidence is itself subject to a public interest defence. I take the view that, in cases of this type, consideration should be given to the possibility of breaching the duty of confidence where there is a sustainable public interest defence for doing so. The grounds on which such a public interest defence may be sustained are quite narrow and include, for example, the revelation of wrongdoing or danger to the public. In this case the records relate to a tax settlement and do not reveal any wrongdoing. Having carefully examined the records and considered the matter, I cannot identify any particular public interest defence ground supporting the release of the records in question.

Section 21(1)(a)

The Revenue also refused access to certain records under section 21(1)(a). This section allows the refusal of a request, subject to the public interest test, if access to the record concerned could, in the opinion of the head, reasonably be expected to -

"prejudice the effectiveness of tests, examinations, investigations, inquiries or audits conducted by or on behalf of a public body or the procedures or methods employed for the conduct thereof...".

In arriving at a decision to claim a section 21 exemption, a decision maker must, firstly, identify the potential harm to the functions covered by the exemption that might arise from disclosure and, having identified that harm, consider the reasonableness of any expectation that the harm will occur. The test of whether the expectation is reasonable is not concerned with the question of probabilities or possibilities. It is concerned simply with whether or not the decision maker's expectation is reasonable.

While the Revenue accepts that the inquiry under review has concluded by way of a settlement, it argues that release of the records could prejudice the effectiveness of other Revenue enquiries currently in progress and of audits and investigations generally. It argues that release of the records could harm Revenue's investigations into other ongoing cases as they will disclose plans and positions taken in its negotiations and will allow access to information which had not been disclosed throughout the negotiations in this particular case.

The Revenue submits that :

"...negotiation of tax settlements, in general, is a key function of Revenue's audit and investigation programme. The majority of audits involve negotiation at various levels to arrive at the taxable figure and negotiations to decide on the level of interest and penalties. The release of these records would enable taxpayers and their agents to see how Revenue approached this case and to be better informed as to how they might proceed in future negotiations with Revenue. Indeed, if taxpayers were able to use the Freedom of Information Acts to gain access to this type of internal deliberations and background material for negotiations, it is clear that it would prejudice our ability to successfully conduct such negotiations and in turn this would prejudice the effectiveness of audits and investigations and would prejudice the procedures and methods employed therein."

In Case No 99232 - Y Partners and the Revenue Commissioners, where Y partners were seeking access to the Revenue's records relating to the Y partnership and the Revenue were claiming that section 21(1)(a) applied, my predecessor commented that:

"For the Revenue to succeed in its arguments, I have to be satisfied that granting access to these records could reasonably be expected to prejudice the effectiveness of particular investigations still in progress. I do not have to be satisfied that such an outcome will definitely occur. It is sufficient for the Revenue to show that it expects such an outcome and that its expectations are justifiable in the sense that there are adequate grounds for the expectations."

The records in the present case contain information which show how the Revenue carried out its investigation into Mr Haughey's tax affairs. Many of the records also indicate the reasons why it took certain approaches to settlement discussions with Mr Haughey and the reasons why it rejected other strategies. The records detail the Revenue's internal discussions or observations on the outcome of certain enquiries and the identification of potential courses of action. Each record on its own reveals only a part of Revenue's strategy in this regard. However, taken as a whole, it seems to me that material of this kind would be of significant assistance to taxpayers subject to similar investigations, allowing them to predict the likely trend of Revenue enquiries and to prepare themselves in advance to deal with such enquiries. I am satisfied that putting such taxpayers in this advantageous position could reasonably be expected to prejudice the effectiveness of the investigations and inquiries involving them. I am also satisfied that disclosure to the world at large of the details of any agreement concluded at the end of negotiations between a taxpayer and the Revenue could reasonably be expected to prejudice future negotiations on settlements on the basis that taxpayers would be less likely to enter into such negotiations and settlements if the details of the settlements were made public. In this regard it is worth noting that the details of the settlement which were included in the press release, i.e. details of the final amount payable, interest and penalties, etc. were only made public with the consent of Mr Haughey. Therefore, I find that the Revenue is justified in refusing access to certain records in accordance with section 21(1)(a). These records are:

Drafts and final version of the Settlement Agreement

Internal documents detailing the approach to the settlement including C2 to C7, C12

Minutes of meetings between the Revenue and Mr Haughey's agents including C10 and C11

Correspondence between the Revenue and Mr Haughey's agents

Notes of discussions between the Revenue and Mr Haughey's agents including C8 and C9

Section 21(1)(a) is subject to a public interest test which is addressed later in this decision.

Section 21(1)(c)

Section 21(1)(c) of the FOI Act provides that a request may be refused if:

"...access to the record concerned could, in the opinion of the head, reasonably be expected to

(c) disclose positions taken, or to be taken, or plans, procedures, criteria or instructions used or followed, or to be used or followed, for the purpose of any negotiations carried on or being, or to be, carried on by or on behalf of the Government or a public body".

The Act provides strong protection for negotiating positions of public bodies. The only requirement for the exemption to be met is that release of the records would disclose such positions. There is no requirement that disclosure would have an adverse effect on the conduct by the body of its negotiations. Records relating to past, present or future negotiations may be protected.

While details of the final terms of the settlement agreement would not be exempt pursuant to section 21(1)(c) there are a number of records which disclose strategies, positions and alternatives considered and taken by the Revenue and to which section 21(1)(c) applies. I consider that section 21(1)(c) applies to :

Internal records relating to the Revenue's approach to the settlement including C2, C3, C4, C5, C6, C7 and C12

Again, this section is subject to a public interest test which is addressed below.

Section 23(1)(a)(ii)

Section 23(l)(a)(ii) of the Act, allows for records to be withheld if the release of the record:

"could...reasonably be expected to prejudice or impair the enforcement of, compliance with or administration of any law".

The Revenue submits that the arguments outlined in respect of section 21(l)(a) also apply in respect of this section in that allowing access to these records could prejudice and impair the enforcement of, compliance with or administration of tax law. The law in question is the Taxes Consolidation Act 1997.

In its submission the Revenue also states that:

"..., if Revenue were to release records of conversations with the agents in this case whether at meetings or over the telephone, it could lead to agents in general being more reluctant to engage with Revenue and to be less candid with us in relation to the tax affairs of their clients. Information currently voluntarily forthcoming at meetings would be much more difficult to elicit. Relationships of trust built up by Revenue over many years with agents would be damaged. This in turn would mean that Revenue would have to devote more resources to gathering information that, heretofore, was freely available to Revenue. Revenue must operate within the budget and resources available to it and having to divert greater resources into intelligence and information gathering could impair Revenue's ability to assess and collect tax. We are of the view that the harm suggested could occur and that it is not unreasonable to think that it could occur."

Some of the Revenue's arguments in relation to section 21(l)(a) and section 23(l)(a)(ii) are interdependent. I have already accepted that disclosure could reasonably be expected to prejudice the effectiveness of other Revenue investigations. For the same reasons, I accept that disclosure could reasonably be expected to prejudice the enforcement of, compliance with and administration of the tax laws and that section 23(l)(a)(ii) applies to the following records:

Drafts and final version of the Settlement Agreement

Internal documents detailing the approach to the settlement including C2 to C7, C12

Minutes of meetings with Mr Haughey's agents including C10 and C11

Correspondence between the Revenue and Mr Haughey's agents

Notes of discussions between the Revenue and Mr Haughey's agents including C8 and C9

Parts of the schedules of Mr Haughey's income and expenditure.

Section 23(3) provides that access to a record may be granted in specified circumstances where the public interest would, on balance, be better served by granting than by refusing to grant the request. These are where the record discloses that an investigation is not authorised by law or contravenes any law, or it contains information concerning the performance of a public body of functions relating to law enforcement or contains information concerning the effectiveness or merits of any programme for prevention, detection or investigation of breaches of the law. No such record exists in the present case and I am satisfied that section 23(3) does not apply.

Section 28(1)

Section 28 of the Act provides that a public body should refuse to grant a request where access to the record would involve the disclosure of personal information about someone other than the requester. Clearly much of the information contained in the records consists of personal information about Mr Haughey. This includes details of his income, expenditure, health, property, bank accounts, etc. It also contains some personal information in relation to Mr Haughey's family. Again, this section is subject to a public interest test.

Public Interest

As mentioned earlier in my decision, sections 21 and 28 contain a public interest test whereby access can be granted if, on balance, the public interest would be better served by granting than by refusing to grant the request. You should note that this only applies to the small number of records or parts of records to which I am satisfied that only section 21 and/or section 28 apply and which, apart from these sections access would be granted. There is no public interest balancing test which can apply to grant access to those records where I am satisfied that sections 22(1)(a), 26(1)(b) or 23(1)(a)(ii) apply.

In its submission, the Revenue accepts that there is a public interest in disclosing how it conducted itself in relation to this particular settlement:

"There is a strong public interest in revealing how Revenue carried out its functions in this case. There is also a strong public interest in openness and transparency as regards records relating to settlements and agreements reached by, and with, public bodies.

As against these, there is a very significant public interest in allowing Revenue to perform its functions effectively and efficiently. There is also a very significant public interest in allowing the Moriarty Tribunal fulfil its role. Equally, there is a very significant public interest in maintaining the right to privacy of an individual....".

In taking the view that sections 21(1)(a) and 21(1)(c) apply, I am accepting that access to the records concerned could reasonably be expected to prejudice the effectiveness of inquiries or audits conducted by the Revenue or disclose positions taken by the Revenue for the purposes of negotiations. In finding that section 28 applies I am accepting that access to the records would involve the disclosure of personal information of Mr Haughey. Any public interest in disclosure must be balanced against the harms that may occur by such disclosure in these circumstances.

In relation to the public interest in section 21, I would again refer to a comment by my predecessor in Case No 99232 - Y Partners and the Revenue Commissioners, where Y partners were seeking information held by the Revenue concerning themselves:

"As a general proposition, I agree that there is a public interest in public bodies conducting their business in an open and transparent manner. However, there are limits to such openness in the case of investigations, which the FOI Act recognises. ...

The particular investigation to which Y Partnership was a party has concluded and, generally, in cases such as this where a public body has carried out an investigation and has taken action or where it has decided that no further action is warranted following such an investigation, the bias normally moves in favour of release of the record. However, having regard to the harm identified by the Revenue as reasonably expected to occur in relation to investigations still in progress, and to the evidence presented by the Revenue as to the nature and extent of such investigations, I am satisfied that the public interest at this time would be, on balance, better served by not releasing these records."

In relation to any public interest in granting access to personal information the then Commissioner stated in Case No 020288 - Mr X and the Revenue Commissioners (unpublished), that:

"the protection of individual privacy is a very strong public interest argument against releasing a taxpayer's personal information to a third party. All taxpayers have an expectation that their dealings with Revenue will be treated in strict confidence and will not be disclosed to third parties apart from certain limited information that is published from time to time in certain circumstances. I believe that any dilution of the understanding of confidence would potentially damage the ability of the Revenue to carry out its functions effectively and may lead to taxpayers becoming reluctant to co-operate fully with the Revenue".

There is, therefore, a very significant public interest in allowing the Revenue to perform its functions effectively and efficiently.

I note that you have put forward the argument that Mr Haughey is not in the same situation as any other taxpayer, given his role as a public representative. In Case No 99602 - Mr X and Department of Justice, Equality and Law Reform, a similar argument was put forward in relation to the public interest in disclosure of personal information about people in the public domain. In that decision my predecessor commented:

"Essentially, your letter... suggested that there is a public interest in releasing this information because the individuals concerned are public figures, they or parties associated with them are alleged to have been involved in criminal activity and one of them has expressed controversial political views. In other words, the information should be released because of who the individuals are, because allegations have been made against them and because of the views of one of them. You have not argued how the public interest would be served by release of the information. In my view none of the factors put forward by you is sufficient to enable it to be said that it is in the public interest that information about whether the individuals concerned have applied for Irish citizenship should be disclosed.

I accept that such information may be of interest to the public in the sense that it may satisfy public curiosity on the point. I do not accept that this means that there is a public interest in disclosing the information.

The FOI Act recognises that there is a public interest in protecting the right to privacy and it seems to me that the matters which you mention do not destroy that right...".

I take a similar view in relation to Mr Haughey's dealings with the Revenue. I believe that Mr Haughey is entitled to the same degree of privacy in his dealings with the Revenue as any other taxpayer and while there is a public interest in showing how the Revenue dealt with Mr Haughey, it is no stronger or weaker than that which should be afforded to the Revenue's dealings with any taxpayer. Similarly, I accept that while such information may be of interest to the public in the sense that it may satisfy public curiosity, I do not accept that this means that there is a public interest in disclosing the information which outweighs the public interest in protecting Mr Haughey's personal information and the public interest in allowing the Revenue perform its functions effectively and efficiently.

I also note that the Moriarty Tribunal has been specifically set up to examine, inter alia, the actions of the Revenue in relation to Mr Haughey's tax affairs. It seems to me that any public interest in disclosure of the records is reduced as the public interest in the accountability of the Revenue in relation to Mr Haughey's affairs is largely addressed by the enquiries being conducted by the tribunal.

Consequently, I find that the public interest factors in favour of release do not outweigh those against in this case.

Section 22(1A)

As I have found that sections 22(1)(a), 26(1)(b), 21(1)(a), 21(1)(c), 23(1)(a)(ii) and 28(1) apply in various combinations to the records sought it is not necessary to consider the Revenue's claim that section 22(1A) also applies. However, in order to provide guidance to public bodies, I believe it would be useful to consider the interpretation and application of section 22(1A) in the present case.

Section 22(1A) was introduced through the Freedom of Information (Amendment) Act, 2003. The section provides that a public body may refuse to grant a request if the record concerned:

"relates to...the business or proceedings, of", a tribunal and "the request is made at a time when ...the performance of the functions of the tribunal, ...has not been completed."

Section 22(1B) provides that subsection (1A) does not apply to "a record in so far as it relates to the general administration of, or of any offices of, a tribunal ...".

In considering whether the use of section 22(1A) by a public body is justified I must, as with all claims for exemption, have regard to section 34(12) which provides that where a public body refuses access to records under the FOI Act, then in any subsequent review by me that refusal is presumed not to have been justified unless the public body satisfies me to the contrary.

The first thing to notice about section 22(1A) is that it is a discretionary exemption. Section 22(1A) gives the public body discretion to refuse to grant a request where two conditions are met, i.e. (a) the record concerned relates to the appointment or the business or proceedings of a tribunal and (b) the request is made prior to the completion of the functions of the tribunal. However, even where both those conditions are met, a public body is still faced with a further decision, i.e. whether to exercise its discretion to refuse access.

A question arises as to whether the FOI Act allows me to review the decision of a public body to exercise a discretion to refuse access in accordance with section 22(1A) . However, I am satisfied that such a decision may be reviewed by me. If the section were to be construed as not allowing any further evaluation of how that discretion is to be exercised, the Act would be creating a discretion that could not be challenged by any of the existing legal principles applicable to the exercise of a statutory discretion by an administrative authority. Having regard to the provisions of section 34(12) I am satisfied that a public body seeking to rely on section 22(1A) must be able to justify its decision to me including its decision to exercise its discretion to refuse access. This requirement reflects the FOI Act's underlying presumption that records will be released and the fact that a person seeking records under the FOI Act is acting on the basis of a legal right. As McKechnie J. put it, in Deely and the Information Commissioner (2000 No. 95 MCA), a FOI requester exercises that right "not out of grace and favour of the public body in question, but rather pursuant to the force of law. It is a legal right which he is exercising...". All decisions under the FOI Act must be consistent with the overall scheme and objectives of the Act. As McKechnie J. put it in the same judgement, and by way of comment on the Long Title to the Act, the exercise of FOI rights should be viewed "in the context of and in a way to positively further the aims, principles and policies underpinning this statute, subject and subject only to necessary restrictions ...".

Section 22(1A) does not provide any guidance as to how the discretion ought to be exercised or what factors ought to be taken into account in exercising this discretion. In relation to the discretionary element of section 22(1A) I will accept that it has been correctly applied only where the public body can show that the public body has exercised its discretion appropriately in the context of the FOI Act. This means that the public body must show that the refusal of access is justified in the circumstances and that the refusal does not fly in the face of "the aims, principles and policies underpinning" the FOI Act.

The exercise of discretion requires that the public body has properly considered all relevant factors and has not taken into account any irrelevant considerations. The relevant factors for consideration depend upon the circumstances of the case. The following is a non-exhaustive list of factors that may be relevant:

the presumption in favour of release under the FOI Act

the requirements of Constitutional justice

the nature of the record and the extent to which it contains information that is significant and/or sensitive to the functions, processes or deliberations of the tribunal/ inquiry; i.e. whether refusal of the record is reasonably necessary (having regard to the aims, principles and policies underpinning FOI) to protect the interests of the tribunal/inquiry

whether disclosure would be likely to increase public confidence in the operation of the tribunal/inquiry

whether the requester is seeking access to his or her own personal information

whether the request could be satisfied by granting access in part and by providing the requester with as much information as is reasonably practicable

whether the body has applied the exemption to all the records as a category without testing whether some of the records do not require to be withheld?

whether previous decisions by me have found that similar types of records or information should or should not be released

whether the body's decision meets the principle of proportionality? is the outcome excessive having regard to the intended objective?

whether the decision suggests adherence to an inflexible policy rule? (e.g. is this exemption always invoked where such records are involved?)

In the present case the Revenue claims that section 22(1A) applies to all the records within the scope of my review. In support of its claim the Revenue has pointed out that the terms of reference of the Tribunal of Inquiry (Payments to Messrs Charles Haughey and Michael Lowry), more commonly referred to as "the Moriarty Tribunal", include examining:

"a). Whether any substantial payments were made, directly or indirectly, to Mr Charles Haughey...during any period when he held public office commencing on 1 January, 1979 and thereafter up to the 31 December, 1996 in circumstances giving rise to a reasonable inference that the motive for making the payment was connected with any public office held by him or had the potential to influence the discharge of such office."

"j). Whether the Revenue Commissioners availed fully, properly and in a timely manner in exercising the powers available to them in collecting or seeking to collect the taxation due by ....... Mr Charles Haughey ...... (on) the gifts received by Mr Charles Haughey identified in Chapter 7 of the Dunnes Payments Tribunal Report and any other relevant payments or gifts identified in paragraph (a) above."

The Revenue submits that:

"...the terms of reference require the Moriarty Tribunal to inquire into the actions taken by the Revenue Commissioners in attempting to collect the tax liabilities due on the gifts received by Mr Haughey and identified in the McCracken Tribunal Report and on any other relevant payments or gifts identified through the Moriarty Tribunal's own investigations. The gifts to Mr Haughey identified in the McCracken Tribunal Report were the subject of a separate interim tax settlement in April 2000. While the investigative and public evidence phase of the Moriarty Tribunal's work is complete in relation to Revenue and the collection of tax on those gifts, the Tribunal's findings in that regard have yet to be made. In the course of the Tribunal's work on that phase of their remit, they sought and were provided with relevant documentation and information regarding the actions taken by Revenue in collecting the tax due by Mr Haughey. The then Chairman of the Revenue Commissioners and other Revenue officials involved in the case also gave detailed sworn, evidence at public sessions of the Tribunal in relation to the negotiation of the tax settlements reached with Mr Haughey in relation to those payments.

However, you should note that in relation to the further payments to Mr Haughey identified by the Moriarty Tribunal under term of reference (a), their inquiry into the performance of the Revenue has yet to be undertaken. In that regard Revenue are of the view that the twelve core records constitute records that will inform the Tribunal's investigation of whether Revenue availed fully and properly and in a timely manner in exercising the powers available to them in collecting or seeking to collect the taxation due by Mr Haughey on these further payments."

Thus, the Revenue argues, the records relate to the business or proceedings of the Moriarty Tribunal. It has also made it clear in its submission that it believes that all the records within the scope of your request are exempt from disclosure under section 22(1A).

I have carefully examined the records at issue. The records refer to:

the plans and positions adopted by the Revenue during the course of the settlement discussions

the assessment and calculation of Mr Haughey's earnings and possible tax due

the evaluation of strategies

discussions with Mr Haughey's representatives regarding a possible tax settlement

legal advice sought and received from the Revenue Solicitor regarding the approach to the settlement

consideration of issues by the Revenue Board before entering final negotiations on a settlement.

Furthermore, from my examination of the records it is clear to me that they are all concerned with tax due or possibly due, as a result of gifts received by Mr Haughey during the period outlined in the terms of reference of the Moriarty Tribunal. Having regard to the terms of reference and the contents of the records in question it is clear to me that these records can be described as relating to the business or proceedings of the tribunal.

It is also clear to me that the records are concerned with sensitive matters. I have already found that the records are exempt from disclosure by virtue of sections 22(1)(a), 26(1)(b), 21(1)(a), 21(1)(c), 23(1)(a)(ii) and 28(1). In the circumstances I am satisfied that the Revenue is justified in exercising its discretion to refuse access in accordance with section 22(1A).

In your submission you suggest that the Revenue's claim is spurious as the tribunal has not dealt in public with the section of its inquiry relating to Mr Haughey for a number of years. However, as can be seen from the provisions of section 22(1A) the only issue which needs to be considered in this regard is whether the tribunal has completed the performance of its functions. As you are aware, this is not the case in relation to the Moriarty Tribunal. I should also point out that I am satisfied that none of the records can be said to relate to the general administration of the tribunal and that I am satisfied the tribunal in question here is a tribunal for the purposes of section 22(1A) as it was established under the Tribunals of Enquiry (Evidence) Act, 1921.

Decision

Having carried out a review under section 34(2) of the FOI Act, I hereby affirm the decision of the Revenue to refuse access to records which fall within the scope of my review.

A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated not later than eight weeks from the date of this letter.

Yours sincerely

Emily O'Reilly
Information Commissioner