Case Number: 150419

Whether the Department was justified in refusing to release three records relevant to the applicant's request for records "relating to the Budget decision to create a new law prohibiting companies from being 'stateless' in terms of the place of their tax residency and the decision not to bring this requirement in until the end of 2014"

Conducted in accordance with section 22(2) of the FOI Act, by Elizabeth Dolan, Senior Investigator, who is authorised by the Information Commissioner to conduct this review

Background

On 30 October 2013, the applicant made an FOI request to the Department for records "relating to the Budget decision to create a new law prohibiting companies from being 'stateless' in terms of the place of their tax residency and the decision not to bring this requirement in until the end of 2014". On 9 December 2013, the Department part granted the request. The applicant sought an internal review of this decision. On 22 January 2014, the Department upheld its original decision. On 8 March 2014, the applicant applied to this Office for a review of the Department's decision. In the course of that review (reference number 140057), the Department notified this Office of the existence of three further records that it had identified as being relevant to the request. This Office informed the applicant about these records. In his decision of 19 November 2015, the Commissioner directed the Department to conduct a fresh decision making process in relation to the three further records it had identified.

On 2 September 2015, the applicant made a request (prior to the Commissioner's decision in case 140057 issuing) to the Department for access to the same three further records. On 5 October 2015, the Department refused the request on the basis that the records are exempt under 35(1)(a) of the Act. The applicant sought an internal review of this decision. On 10 November 2015, the Department upheld its original decision. It also refused access to the three records under section 40(1)(a) of the Act. On 28 November 2015, the applicant applied to this Office for a review of the Department's decision.

In its submissions to this Office, the Department argued that the records were also exempt under section 35(1)(b) of the Act. This Office informed the applicant of the Department's submissions in relation to section 35(1)(b). In response, the applicant provided submissions arguing that section 35(1)(b) did not apply to the three records.

At this stage, I must bring the review to a close by the issue of a formal binding decision as the applicant requires this. In conducting my review, I have had regard to correspondence between the applicant and the Department, to correspondence between the applicant and this Office, to correspondence between the Department and this Office, to the records at issue and to the provisions of the FOI Act.

Scope of the review

The scope of this review is confined to whether the Department was justified in refusing to release records 1-3 on the basis that they are exempt under section 35(1)(a) and/or section 35(1)(b) and/or section 40(1)(a) of the FOI Act.

Preliminary Matters

Section 13(4) of the FOI Act does not allow this review to have regard to any reasons as to why the applicant is seeking the withheld records (although such reasons may be relevant to consideration of the public interest).

I should explain the approach to granting access to parts of records. Section 2 of the FOI Act defines "record" as including "anything that is a part or a copy" of a record. Section 18 of the Act provides for the deletion of exempt information and the granting of access to a copy of a record with such exempt information removed. This should be done where it is practicable to do so and where the copy of the record thus created would not be misleading. However, the Commissioner takes the view that neither the definition of a record nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from records for the purpose of granting access to those particular sentences or paragraphs. Generally speaking, therefore, the Commissioner is not in favour of the cutting or "dissecting" of records to such an extent.

Section 22(12)(b) of the FOI Act provides that a decision to refuse a request shall be presumed not to have been justified unless the head of the FOI body shows to the Commissioner's satisfaction that its decision was justified. This means that the onus is on the Department to satisfy the Commissioner that its decision to refuse access to the records was justified.

Although I am obliged to give reasons for my decision, section 25(3) requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record. This means that the description which I can give of the records at issue and the material that I can refer to in the analysis is limited. The release of a record under the FOI Act is considered, effectively, as release to the world at large.

Finally, the Courts have recognised that a review decision by this Office is by way of a hearing de novoin the light of the facts and circumstances applying at the date of my review, rather than by reference to the facts and circumstances that applied at an earlier date.

Analysis and Findings

The Records

- Record 1 contains a list of certain Multi-National Companies (MNCs), and information about them in the context of meetings to be scheduled;
- Record 2 contains a note of a conference call between officials of the Department, representatives of a named MNC and third parties;
- Records 3 also contains a note of a conference call between officials of the Department, representatives of a named MNC and third parties.
It is fair to say that the content of the three records is related to the content of record 56 on which the Commissioner made findings in case 140057.

Section 35(1) - information obtained in confidence

The Department has refused to release records 1-3 on the basis that they are exempt under section 35(1)(a) and/or section 35(1)(b) of the Act. Section 35(1)(a) provides a mandatory exemption for certain records containing information given to an FOI body in confidence. In his decision in case 140057 concerning similar records held by the Department, the Commissioner set out in some detail his approach to section 26(1) of the FOI Act 1997, as amended. The relevant exemption under the FOI Act 2014 is section 35(1). I do not consider it necessary to repeat here the detailed provisions of section 35(1)(a), since for reasons set out below and in case 140057, I consider that the applicable provision to be examined in this review is section 35(1)(b).

Section 35(2) - records prepared by an FOI Body

Section 35(2) provides that section 35(1) does not generally apply where a record is prepared by a member of staff of an FOI body or a service provider to an FOI body, unless disclosure would be a breach of a duty of confidence owed to a person other than such a staff member or service provider. As section 35(1) does not apply where the records fall within the terms of section 35(2), section 35(2) should be considered at the outset.

In its submissions to this Office, the Department states that in advance of Budget 2014, it consulted or considered consulting a number of MNCs to ascertain their views in relation to tax matters and in relation to potential changes to Irish tax law. According to the Department, it created records 1-3 in the course of these consultations. I satisfied therefore, that the records were created by members of staff of the Department in the course of the performance of their functions.

Section 35(2) is aimed at limiting the use of the confidentiality exemption where the records are internal records of the FOI body. However, section 35(2) does not apply if disclosure of the information concerned would constitute a breach of a duty of confidence that is owed to a person other than an FOI body. A duty of confidence may be provided for by agreement, enactment or otherwise by law (i.e. an equitable duty of confidence). In submissions to this Office, the Department argues that disclosure of these records would constitute a breach of an equitable duty of confidence owed to the MNCs and their representatives who are referred to in the records.

As set out by the Commissioner in Case 140057, in considering whether or not an equitable duty of confidence exists, this Office has regard to the three elements of what are generally known as the Coco test (Coco v A.N. Clark (Engineers) Ltd[1969] R.P.C. 41):
"First, the information itself ... must 'have the necessary quality of confidence about it'. Secondly, that information must have been imparted in circumstances importing an obligation of confidence. Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it."

In submissions to this Office, the applicant argues that while the Department has stated that it was required to give assurances of confidentiality to the MNCs referred to in the records, there is no evidence that the information requested has 'the necessary quality of confidence about it'. He argues that meetings with companies affected by tax law reforms do not attract an automatic duty of confidence like, for example, discussions about a person's health records. According to the applicant, the Courts effectively look at government held information through 'different spectacles' to that held by private individuals or entities. He argues that the Department has not actually specified how its ability to formulate tax policy would be prejudiced in the absence of engagement by MNC's. Finally, he argues that the Department's refusal to release the records flies in the face of the aims of lobbying legislation.

In order for information to have the necessary 'quality of confidence', it must be concerned with private or secret matters rather than information which is already in the public domain. I accept as the Commissioner did that the information imparted by the MNC's, including their identities and those of their representatives together with their views has the necessary quality of confidence about it in the circumstances of this case. As pointed out above, the information at issue here is similar to record 56 which the Commissioner previously considered and I am not aware of any change in circumstances which would convince me to depart from the analysis and findings in case 140057. I accept the Department's position that its consultations were intended to discuss confidential matters and that senior staff in the MNCs would not have participated unless they were assured of confidentiality.

As regards the applicant's submissions on lobbying, I concur with the Commissioner's finding in the previous case that these discussions should be seen in a different light to general lobbying. I consider in this case also that the information contained in records 1-3 is not exclusively government information. It seems to me that the details are as much about the MNCs concerned as they are government information. I am satisfied that the information contained in records 1-3 was imparted in circumstances importing an obligation of confidence.

The third requirement of establishing breach of an equitable duty of confidence is met where disclosure of the information would result in an unauthorised use to the detriment of the party who communicated it. I understand that release of information without consent is enough for detriment to arise. I therefore consider the final test to have been met. In light of the above, I am satisfied that the Department owes an equitable duty of confidence to the MNCs referred to in records 1-3 and the records are exempt under section 35(1)(b), subject to consideration of the public interest defence.

The applicant will be aware from the decision in case 140057, to which he was a party, that not all of the material in that case for which the Department claimed a duty of confidence was held to meet the tests. It is clear that the content of each record must be carefully examined in applying the relevant exemption.

Public Interest Defence

Section 35(1)(b) is not subject to the general public interest balancing test in section 35(3). However, it is established that the action for breach of confidence is itself subject to a public interest defence. In case 090163 (Sunday Times and The Office of the Revenue Commissioners) the Commissioner referred to Court precedent and commented that the Courts have found the public interest grounds on which disclosure may be favoured to be quite narrow such as exposure or avoidance of wrongdoing and ensuring the maintenance of the principles of justice (as per the decision of the Supreme Court in National Irish Bank v. Radió Telifis Éireann[1998] 2 ILRM 196).

The applicant submits that sufficient consideration has not been given to the importance that the Courts have placed on freedom of the press. The applicant argues that a "far more expansive approach" to the public interest grounds that may justify a breach of a duty of confidence was evident in the recent High Court decision in Mc Killen and Anor v. Times Newspapers Limited and Ors[2013] IEHC 150. He argues that in light of the approach taken in that case, his FOI request should be granted in the public interest. While the applicant quoted from part of the High Court judgment at issue, I consider that this requires to be set in its proper context. In the Mc Killen case, Mr. Justice Mac Eochaidh stated as follows:-

"...The principal authority addressed to this Court on circumstances when the confidential relationships may be invaded is the decision of this Court and of the Supreme Court in National Irish Bank v. Radió Telifis Éireann[1998] 2 ILRM 196.

It is contended on behalf of the plaintiffs that the only circumstance in which confidential relations can be breached and details published is when it is intended to report upon or unearth an iniquity or misdeeds of some sort and that there is no other category recognisable by the courts which would permit an invasion of confidences.

While it is true to say that in the Supreme Court, that particular category was indeed identified by Mr. Justice Lynch speaking for the majority, there was, I think, a more detailed discussion of the principles involved in invading confidences and disclosing matters that are otherwise thought to be confidential in the decision of Shanley J. in the High Court. If I could quote briefly from the manner in which Shanley J. described the law, he said at page 475 of the judgment as follows:

"...While the disclosure of serious crime will always be in the public interest there is also a range of other activities (which are not necessarily criminal) the disclosure of which may also justify a breach of confidence on the grounds that its disclosure is in the public interest. It would, I believe, be unwise to attempt to find the boundaries of the so-called exception of public interest and I refrain from doing so other than to observe (as Ungoe­Thomas J. did in Beloff v. Pressdram Ltd[1973] 1 All E.R. 241 at p. 260) that:- "... misdeeds of a serious nature and importance to the country" will justify disclosure on the grounds that such disclosure is invariably in the public interest."

Therefore, it seems to me that the category of cases in respect of which confidential information can be disclosed is not limited to circumstances where there is an interest in publishing it for the purposes of unearthing a misdeed or an iniquity and that is not solely what the law provides. That is not what the Supreme Court held, in my view, in National Irish Bank v. Radió Telifis Éireann[1998] 2 ILRM 196."

The applicant states that in the above case Mr. Justice Mac Eochaidh allowed a limited amount of publication of confidential information because of what he described as "the very significant public interest" at issue which had nothing to do with any iniquity or wrongdoing. He submits that the details of the engagement of MNCs with the Department of Finance in respect of a proposed change of Irish tax law which subsequently occurred, very much raises issues of national importance and therefore this FOI request should be granted. The applicant states that 'maintaining the integrity of the State' is a relevant ground to justify a breach of a duty of confidence which is in the public interest. According to the applicant, the refusal to grant the FOI request fails to provide any reassurance to the public that the State acted at all times in an impartial, fair and appropriate manner.

I do not accept the applicant's categorisation of the Mc Killen decision as "a far more expansive approach" to the category of cases in respect of which confidential information can be disclosed. It seems to me that the point which Mr. Justice Mac Eochaidh made, was that the public interest grounds that may justify a breach of a duty of confidence are not limited to unearthing a misdeed or iniquity. I consider that the approach taken in the McKillen decision is consistent with the approach taken by the Supreme Court in the National Irish Bank decision and does not amount to "a far more expansive approach". Indeed, the judgment of Binchy J. in O'Brien v. Radió Telefis Éireann[2015] IEHC 397,to which the applicant makes reference in his submissions was expressly considered by the Commissioner in case 140057. I think that it is worth repeating his view in this regard, with which I concur:

"I accept that the making of taxation policy, which in turn affects tax revenue and the "public purse", can be categorised as a meaningful issue of public importance. However, I have no remit whatsoever to consider, or make findings on the extent to which shortcomings in any public body's decision making process may be evident from any record. I do accept, however, that release of information showing how such policies were arrived at enables the general public to establish if those decisions were properly taken. This, of itself, is not to say that "every detail of the affairs or operation" of a public body must be released to the world at large under FOI, particularly where subject to a duty of confidence."

Records 1-3 do not show how the Department's ultimate decisions on taxation policy were made. I note that the Department released general details of consultations in case 140057. Disclosing details of individual companies would not give any further insight into how the Department made the decisions that led to the relevant Budget 2014 announcement. Having considered the public interest defence, I am not satisfied that I have any basis for finding that the duties of confidence owed may be excused in this case.

In summary, I find that to release records 1-3 would result in a breach of an equitable duty of confidence owed to the MNCs concerned. I find that section 35(2) does not apply, and I find that the records are exempt under section 35(1)(b) of the FOI Act. As a result of this finding, it is not necessary for me to consider section 35(1)(a) and/or section 40(1)(a) of the Act further.

Decision

Having carried out a review under section 22(2) of the FOI Act 2014, I hereby affirm the Department's refusal of records 1 to 3 under section 35(1)(b) of the FOI Act.

Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.

 

Elizabeth Dolan
Senior Investigator