Whether the Council was justified in refusing access to parts of a contract under sections 36(1)(b) and (c) and section 37(1) of the FOI Act

4 June 2021

Background

The background to this case is a previous review by this Office, Case 180213, available at www.oic.ie. In 2018, the applicant made a request to the Council for records relating to the purchase and sale of St. Francis Abbey Brewery. The Council granted the applicant's request in part and partially released a copy of a contract between the Council and Powtom 18 Ltd, a wholly-owned subsidiary of Diageo. On 17 December 2018 the Senior Investigator affirmed the Council’s decision, under section 36(1)(c) of the FOI Act.

On 25 September 2020, the applicant made an FOI request to the Council for “a copy of all previously unreleased parts of the Contract (the Contract in full) of sale dated 28/8/14 made between Powtom 18 Limited (a wholly owned subsidiary of Diageo) on the one hand and Kilkenny County Council on the other hand” and referred to the previous review.

The Council consulted with Diageo under section 38 of the FOI Act before issuing a decision. Section 38 applies to cases where, at some stage in the decision making process, the public body has formed the view that the record(s) in question qualify for exemption under one or more of the relevant exemptions in the FOI Act (i.e. sections 35, 36 and 37) but that the record(s) should be released in the public interest. Where section 38 applies, the public body is required to notify an affected third party before making a final decision on whether or not the exemption(s), otherwise found to apply, should be overridden in the public interest. On 23 October 2020, Diageo objected to the release of the records, on the ground that the records were exempt under sections 36(1)(b) and (c) and section 37(1) of the FOI Act.

On 4 November 2020, the Council refused access to the information on the ground that it is exempt under sections 36(1)(b) and (c) and section 37(1) of the FOI Act. On 5 November 2020, the applicant applied to this Office for a review of the Council's decision.

In conducting my review, I have had regard to the correspondence between the applicant and the Council as outlined above, the correspondence between this Office and both parties, the correspondence between the Council and Diageo, and to the content of the record that was provided to this Office by the Council for the purposes of this review. I have also had regard to submissions made by Diageo to this Office.

Scope of this Review

The scope of this review is confined to whether or not the Council was justified in withholding parts of the contract under sections 36(1)(b) and (c) and section 37(1) of the FOI Act. I will refer to these parts as “the withheld information”.

Preliminary Matters

Before considering the exemptions claimed, I wish to note the following points. First, while I am required to give reasons for my decision under section 22(10) of the FOI Act, I am also required to take reasonable precautions to prevent disclosure of information in an exempt record, under section 25. This means that the extent to which I can describe the withheld information and the level of detail I can discuss in my analysis are limited.

Secondly, with certain limited exceptions, the FOI Act does not provide for the limiting of access to records to particular individuals only. When a record is released under the FOI Act, it effectively amounts to disclosure to "the world at large" (H.(E.) v Information Commissioner [2001] IEHC 58). The FOI Act places no restrictions on the type or extent of disclosure or the subsequent use to which the record may be put.

Analysis and Findings

For completeness, during the review the Council clarified that it was not claiming section 35 of the FOI Act. Diageo did not make submissions on section 35 either. I therefore do not propose to consider section 35.

Section 36(1) - Commercial Sensitivity

The Council claims that the withheld information is exempt under sections 36(1)(b) and (c). Having examined the record and the parties’ submissions, I consider it appropriate to address section 36(1)(c) first.

Section 36(1)(c)

Section 36(1)(c) provides that an FOI body shall refuse to grant an FOI request if the record concerned contains information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.

The standard of proof required to meet section 36(1)(c) 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. Having said that, the Commissioner expects that a person seeking to rely on section 36(1)(c) would be able to show that contractual or other negotiations were in train or were reasonably foreseen which might be affected by the disclosure and explain how exactly the disclosure could prejudice the conduct or the outcome of such negotiations. Where an FOI body is relying on this exemption for the refusal of a record, it must go on to consider the public interest and whether section 36(3) applies in relation to the record concerned.

Submissions

In light of Diageo’s submission that it has made a partnership arrangement but not a sale of property, the Council says that the circumstances of this case have not changed since the previous review carried out by this Office. It says that releasing the withheld information may result in a material financial loss to Diageo and prejudice their competitive position in future negotiations. It says that the released information shows clearly how public funds have been used in revealing the purchase price, VAT, pre-conditions agreed, extent of land sold etc.

Diageo made detailed submissions about the withheld information, on individual clauses and schedules. In accordance with section 25 of the FOI Act, I cannot disclose the level of detail provided. However, I can summarise Diageo’s position. It says that releasing the withheld information could prejudice its competitive position and reasonably be expected to result in a material financial loss to it. It says that the clauses concerned were heavily negotiated. It says there is a direct correlation between the sale concerned in the withheld information and negotiations for the St James’s Gate site. Both concern the sale of land upon which brewery operations have been conducted for many years. Diageo says it has signed a development partnership but no land has been sold. It says it is at the beginning of the development of St James’s Gate and there will be further property negotiations, with as yet unknown third parties, during the planning and development phases. Diageo says the withheld information gives significant insights into its negotiating position. It says that prospective counterparties could understand its strengths and weaknesses and use this information as leverage, thereby prejudicing the conduct or outcome of negotiations. Diageo says that the information is specific to its negotiated position on a limited number of issues and provides insights into commercial matters, rather than the environmental condition of the site.

The applicant says that the ground for refusal in the previous review was that there were ongoing negotiations between Diageo in relation to the St James’s Gate site. He says that as Diageo has now identified a development partner for that site, its original ground for refusal is moot. He says that full disclosure is necessary to assuage concerns about the environmental state of the site. He says that Diageo’s argument is tantamount to extending the commercial sensitivity exemption in perpetuity and that a contract signed a few years ago does not necessarily indicate how it proposes to negotiate with third parties in future.

I have examined the content of the withheld information and considered the parties’ submissions. I accept that although Diageo has identified a development partner for St James’s Gate, it will be engaged in future negotiations, as part of the planning and development phases. The applicant argues that past negotiating positions do not necessarily foreshadow future negotiating positions. I accept this as a general point. However, the question for me is whether disclosing this particular information could prejudice the conduct or outcome of negotiations. I accept that these particular clauses and schedules were the result of commercial negotiations. I am satisfied that releasing them to the world at large could provide insights to others, which could prejudice Diageo’s competitiveness in negotiations. Therefore, the conduct and outcome of such negotiations could be prejudiced as far as Diageo is concerned. In the circumstances, I consider that it is reasonable to expect that similar issues might arise for Diageo in future negotiations.

In reaching my conclusion, I have considered the content of the withheld information, as well as the nature of the sites concerned and the parties’ submissions. I consider that releasing the withheld information at this time could prejudice the conduct and outcome of contractual or other negotiations of the person to whom the information relates. Accordingly, I find that section 36(1)(c) applies.

Section 36(2)

Section 36(2) provides for the release of information to which section 36(1) is found to apply in certain circumstances.  I am satisfied that none of the circumstances identified at section 36(2) arises in this case.

Section 36(3)

Having found that section 36(1)(c) applies, I am now required to consider whether, on balance, the public interest would be better served by granting than by refusing the request, under section 36(3). On the one hand, section 36(1)(c) itself recognises a public interest in protecting commercially sensitive information. In this case, I accept that there is a public interest in protecting information that could prejudice Diageo in the conduct or outcome of negotiations. On the other hand, I must consider whether there is a public interest in disclosing the specific content of the withheld information.

In carrying out any review, this Office has regard to the general principles of openness and transparency set out in section 11(3) of the FOI Act. Section 11(3) provides that an FOI body must have regard to the need to achieve greater openness in the activities of FOI bodies and to promote adherence by them to the principles of transparency in government and public affairs and the need to strengthen the accountability and improve the quality of decision making of FOI bodies. However, it is important to note that in The Minister for Communications, Energy and Natural Resources and the Information Commissioner & Ors [2020] IESC 57, the Supreme Court found that a general principle of openness does not suffice to direct release of records in the public interest and “there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure”.

The majority of the contract concerned has been released. It is my view that in so doing, the Council has struck an appropriate balance between optimising transparency, while seeking to protect the commercial interests of the parties concerned. The withheld information comprises particular parts of the agreement, the disclosure of which I accept could prejudice the conduct or outcome of negotiations. I have noted that it is reasonable to foresee future negotiations and that similar issues may arise. I have considered the applicant’s argument that disclosure is necessary to assuage concerns about the environment. Although certain information relates to the environment of the site, it provides insights into the specific nature of the commercial terms agreed.  Having examined the specific content of the withheld information, I do not consider that there is a public interest in disclosing it which, on balance, outweighs the public interest in protecting information which could prejudice the conduct or outcome of negotiations.

I am satisfied that the public interest would be better served by refusing access to the withheld information. I find that the Council was justified in refusing access to it under section 36(1)(c) of the FOI Act.

Given this finding, it is not necessary for me to consider the Council’s claim for exemption under section 36(1)(b).

Section 37 - Personal information

Section 37(1)

The Council claims that certain information is exempt under section 37(1) of the FOI Act. Section 37(1) provides that access to a record shall be refused if it would involve the disclosure of personal information. The FOI Act defines the term “personal information” as information about an identifiable individual that would, in the ordinary course of events, be known only to the individual or his/her family or friends, or information about the individual that is held by a public body on the understanding that it would be treated as confidential. The FOI Act details fourteen specific categories of information which is personal without prejudice to the generality of the foregoing definition.

The information concerned comprises the name and address of an individual. I am satisfied that section 37(1) applies to this information. This is subject to other provisions of section 37, which I examine below.

Section 37(2)

Section 37(2) of the FOI Act sets out certain circumstances in which the exemption at section 37(1) does not apply. I am satisfied that none of the circumstances in section 37(2) apply to the information concerned. That is to say, (a) it does not relate to the applicant; (b) the third party has not consented to the release of the information; (c) the information is not of a kind that is available to the general public; (d) the information does not belong to a class of information which would or might be made available to the general public; and (e) the disclosure of the information is not necessary to avoid a serious and imminent danger to the life or health of an individual.

Section 37(5) - The Public Interest

Section 37(5) of the FOI Act provides that access to the personal information of a third party may be granted where (a) the public interest that the request should be granted outweighs the right to privacy of the individual to whom the information relates, or (b) the grant of the request would benefit the person to whom the information relates. It has not been argued that releasing the records would benefit the individual to whom the information relates and I find that section 37(5)(b) does not apply in the circumstances. I will therefore consider section 37(5)(a).

On the matter of the type of public interest factors that might be considered in support of the release of the information at issue in this case, I have had regard to the findings of the Supreme Court in The Minister for Communications. As noted above, the Supreme Court said that a general principle of openness does not suffice to direct release of records in the public interest and there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure.

Both the language of section 37 and the Long Title to the FOI Act recognise a very strong public interest in protecting the right to privacy, which has a Constitutional dimension, as one of the un-enumerated personal rights under the Constitution. Also, the strong protection afforded to privacy rights under FOI is consistent with Article 8 of the European Convention on Human Rights. Unlike other public interest tests provided for in the FOI Act, there is a discretionary element to section 37(5)(a), which is a further indication of the very strong public interest in the right to privacy. Privacy rights will therefore be set aside only where the public interest served by granting the request (and breaching those rights) is sufficiently strong to outweigh the public interest in protecting privacy.  It is also relevant to note that release of the information must effectively be regarded as release to the world at large.

The applicant says that arguably there may be a public interest in disclosing the name of the individual concerned if information gained during their tenure was used to lobby other public bodies or if the individual took up work for the Kilkenny Abbey Quarter Development Ltd, or any related entity. I have no basis on which to find that any of those issues arise for consideration.

I find no relevant public interest in granting access to the information that, on balance, outweighs the public interest in upholding the privacy rights of the individual whose personal information would be disclosed by releasing the remaining information. In the circumstances, I find that section 37(5)(a) does not apply. I find that the Council was justified in refusing access to the information concerned under section 37(1) of the FOI Act.

Decision

Having carried out a review under section 22(2) of the FOI Act, I affirm the Council’s decision under section 36(1)(c) and section 37(1) of the FOI Act.

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.

Deirdre McGoldrick

Senior Investigator