Case Number: 160247

Whether the Council was justified in refusing to release details of the valuation of Victoria House, Ballina under sections 29 and 36 of the FOI Act

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

Background

On 13 April 2016, the applicant made a request to the Council for all records relating to the valuation of Victoria House, Ballina for the purposes of acquiring it for use as the Mary Robinson Centre, including details of the premium to be applied to the median valuation. On 11 May 2016, the Council refused the request on the basis that the records contained matter relating to the deliberative processes of the Council and that the information was commercially sensitive. The applicant applied for an internal review of that decision on 11 May 2016. The original decision was upheld at internal review stage. On 6 June 2016, the applicant sought a review by this Office of the Council's decision.

I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out the review, I have had regard to the correspondence between the Council and the applicant as set out above. I have also had regard to communications between this Office and the Council, and the applicant on the matter.

Scope of the Review

The scope of this review is concerned with whether the Council was justified in refusing the applicant's request for records relating to the valuation of Victoria House, Ballina for the purposes of acquiring it for use as the Mary Robinson Centre.

Analysis and Findings

As this Office considered that both decision notifications to the applicant fell well short of the requirements of the FOI Act, it exercised its power under section 23 of the FOI Act to direct the Council to provide a fuller statement of reasons. The Council provided a more detailed response by letter dated 3 August 2016. In that response, it stated that while it holds three valuations relating to the property as sought by the applicant, no records exist relating to the calculation or application of a premium. It stated that it was relying upon the provisions of sections 29(1)(a), 36(1)(b) and 36(1)(c) of the FOI Act as grounds for refusing the request.

In essence, the Council's primary argument is that the premature release of the valuation reports could prejudice the outcome of its contractual negotiations to purchase the property, which are ongoing. As such, it seems to me that the Council would have been better served by considering the applicability of section 30(1)(c) which is aimed at protecting the negotiating positions of FOI bodies. It did not do so, however, and instead sought to rely upon sections 29 and 36. Having considered the matter, it seems to me that of the exemptions cited, section 36(1)(c) is of most relevance.

Section 36(1)(c) is a mandatory exemption that provides for the refusal of a request if the record sought contains information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.

 

I should state at the outset that this Office has previously expressed some reservations about FOI bodies seeking to rely upon the provisions of section 36 to protect their financial interests. The Central Policy Unit of the Department of Public Expenditure and Reform has indicated, in a decision maker's manual available on its website at www.foi.gov.ie, that the section is concerned with preventing unwarranted commercial disadvantage to persons carrying on a commercial activity and that the protection of the section applies to bodies and organisations both in the private and public sector. As a general principle, I agree that section 36 is primarily aimed at protecting the commercial interests of parties engaged in commercial activity. As such, it is not clear to me that it is entirely appropriate for an FOI body, which is engaged in the provision of public services, to seek to claim exemption under section 36 to protect its financial interests.

Nevertheless, at best, there appears to be some uncertainty as to the position of FOI bodies under section 36. Accordingly, I am prepared to accept in the circumstances of this case that the FOI Act does not prohibit the Council from seeking to rely upon the provisions of section 36(1)(c) in circumstances where it is claiming that the disclosure of the records sought could prejudice the outcome of ongoing contractual negotiations. The standard of proof required to meet the exemption is relatively low in the sense that the test is not whether prejudice or harm is certain to materialise but whether it might do so.

I accept that the Council is engaged in negotiations to purchase the property in question and that those negotiations are ongoing. The Council argued that if the valuation reports became public, this would impact on the ability of both the Council and the vendor to achieve the price they are hoping to achieve for the property. I accept the Council's argument that the release of the records could prejudice the contractual negotiations and that section 36(1)(c) applies. I am also satisfied that none of the provisions of section 36(2), which provide for exceptions to the application of section 36(1), are relevant in this case. However, that is not the end of the matter as section 36(1)(c) is also subject to a public interest balancing test, as provided for at section 36(3).

Section 36(3) provides that section 36(1) does not apply where the public interest would, on balance, be better served by granting than by refusing the request. The Council argued that it would not be in the public interest to have negotiations interfered with at such a critical juncture. It argued that it would not be in the public interest if the Council ended up paying a higher price for the property because its valuations had been disclosed. It is clear that the Council fully accepts that there is a strong public interest in ensuring transparency and accountability, particularly where the use of public funds is involved. However, it argued that full public accountability will be provided for if and when it concludes an agreement with the owner of the property as it intends to publish the financial details of the project at that stage.

Having considered the matter, I accept that the public interest would, on balance, be better served by refusing the request in circumstances where negotiations concerning the purchase of the property are ongoing. Accordingly, I find that the Council was justified in refusing the request under section 36(1)(c) of the FOI Act

Having found that section 36(1) applies to the records, it is not necessary for me to go on to consider the applicability of section 29(1).

Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the decision of the Council to refuse access to the records under section 36(1)(c).

Right of Appeal

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 four weeks from the date on which notice of the decision was given to the person bringing the appeal.

Stephen Rafferty
Senior Investigator