Whether the Department was justified in its decision to refuse the applicant's request for records of communications, between the Department and Revenue on the subject of Irish  Collective Asset-management Vehicles (ICAVs)

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

In his FOI request of 18 January 2017, the applicant sought access to "records of communications, including memos of meetings between the Department of Finance and Revenue on the subject of ICAVs [Irish Collective Asset-management Vehicles], their use for property transactions and the avoidance of tax and how the law could be changed to prevent this". 

In its decision of 15 February 2017, the Department identified 18 records relevant to the request and granted access to some and refused access to others under various sections of the FOI Act. The applicant sought an internal review of that decision on 28 February 2017.  Following engagement between the Department and the applicant, it was agreed that the scope of the internal review was limited to four records only (Records 3, 15, 17 and 18). The Department issued its internal review decision on 20 March 2017, in which further information from the relevant records was released. Some information in records 3, 17 and 18 was withheld under section 29 and information in record 15 was withheld under section 37. 

On 29 May 2017, the applicant sought a review by this Office of the Department's decision. As the withheld information in record 15 comprised the personal mobile phone number of a staff member, the applicant agreed to exclude this information from the scope of the review. In conducting this review, I have had regard to the submissions of the applicant, to the submissions of Department, and to the contents of the records at issue. I have decided to conclude the review by making a formal, binding decision.

Scope of Review

This review is concerned solely with the question of whether the Department was justified in refusing access to the withheld information in records 3, 17 and 18 under section 29 of the FOI Act.

Preliminary Matter

Section 22(12)(b) of the FOI Act provides that when the Commissioner reviews a decision to refuse a request, there is a presumption that the refusal is not justified unless the public body "shows to the satisfaction of the Commissioner that the decision was justified". Therefore in this case, the onus is on the Department to satisfy the Commissioner that its decision to refuse to grant access in full to the three records at issue was justified.

Analysis and Findings

Section 29(1) of the FOI Act provides that a request may be refused if the record concerned contains matter relating to the deliberative processes of an FOI body (including opinions, advice, recommendations, and the results of consultations), and the body considers that granting the request would be contrary to the public interest. These two requirements are independent. The fact that the first is met carries no presumption that the second is also met. It is therefore important for FOI bodies to satisfy this Office that requirements have been met.

A deliberative process may be described as a thinking process which informs decision making in FOI bodies. It involves the gathering of information from a variety of sources and weighing or considering carefully all of the information and facts obtained with a view to making a decision or reflecting upon the reasons for or against a particular choice. Thus, it involves the consideration of various matters with a view to making a decision on a particular matter. It would, for example, include some weighing up or evaluation of competing options or the consideration of proposals or courses of action.

The material redacted from record 3 comprises three lines relating to the tax treatment of ICAVs. In a submission of 15 June 2017 to this Office, the Department provided some background to its consideration of matters relating to ICAVs. It explained that during 2016, concerns were raised both in the media and the Dáil regarding the use of Qualifying Investor Alternative Investment Funds and ICAVs by non-residents in the Irish property market to minimise their tax exposure on Irish property transactions. It stated that to address these concerns, the Minister for Finance introduced a new tax regime for Irish funds holding Irish real estate in the Finance Act 2016.

The Department added that prior to these concerns being discussed in the public domain, officials from Revenue and the Department had engaged in correspondence to discuss the issues and to suggest potential solutions. It stated that some of the changes suggested were determined not to be the appropriate solution for the particular issue that had been raised. It added, however, that the issues in relation to the tax treatment of funds is something that remains under constant review and that it is routine that a Finance Bill would contain amendments to the tax treatment of funds. It stated that, notwithstanding that some of the suggestions discussed were not proceeded with, the suggestions redacted from record 3 may form part of a deliberative process for future finance bills and on this basis, the relevant material was redacted.

It is important to note that the fact that a deliberative process has concluded does not mean that section 29(1) cannot apply although it may be of relevance when considering whether release of the information would be contrary to the public interest. I am satisfied that the information redacted form record 3 comprises matter relating to the deliberative processes of an FOI body and that the first requirement is therefore met.

The material redacted from record 17 is identical to that redacted from record 18 and concerns a suggested method of calculating a tax figure in respect of a particular activity. I am satisfied that the information in question relates to the deliberative processes of an FOI body and that the first requirement for section 29(1) to apply is also met in respect of this information.

As I am satisfied that the first requirement has been met in respect of all redacted information, I must now proceed to consider whether release of the information would be contrary to the public interest.
The public interest test contained in section 29(1)(b) requires the FOI body to be of the opinion that releasing the records at issue would be contrary to, or against, the public interest. Generally speaking, this requires a body to identify a specific harm to the public interest flowing from release. A mere assertion without supporting evidence is not sufficient to satisfy the requirement that granting access to the record would be contrary to the public interest.

In its submission of 24 October 2017 to this Office, the Department argued that the premature release of the information redacted from record 3 would impair the integrity and viability of the decision making process to a significant or substantial degree without a countervailing benefit to the public. However, it has not explained how the release of the information at issue would give rise to the harm identified, nor is it clear to me how such harm might arise. It seems to me that the mere fact that a possible future option for restricting a tax exemption would be disclosed does not, of itself, mean that the Department could not avail of such an option in the future.

In respect of the information redacted from records 17 and 18, the Department argued that there is a strong possibility that release could contaminate the decision making process. It argued that it is important for the future protection of revenue and calculation of possible tax costs that the method referenced in the records at issue would not be impaired. It further argued that it is possible that the release of the information could impair a future decision by impairing free and open correspondence.

I fully accept that it is important that the tax calculation method referenced in the records would not be impaired. However, the Department has not explained how such harm might arise from the release of the records, nor is it clear to me how such harm might arise. I fail to see how knowledge of the methodology would prevent the Department or Revenue from using such methodology in the future. Furthermore, I cannot accept that the release of the information at issue would impair free and open future correspondence between Revenue and the Department on similar issues.

I am not satisfied that the Department has demonstrated that release of the withheld information would be contrary to the public interest and I find, therefore, that section 29(1) does not apply

Decision

Having carried out a review under section 22(2) of the Freedom of Information Act 2014, I hereby annul the decision of the Department.  I find that section 29(1) does not apply to the withheld information in records 3, 17 and 18 and I direct the release of same. 

Right of 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. 

Stephen Rafferty
Senior Investigator