Whether the Council was justified in refusing access to records relating to a particular property on the basis of sections 15(1)(a), 35(1)(a), 36(1)(b) and 36(1)(c) of the FOI Act

20 December 2022

Background

This case concerns a request for records relating to a property that was purchased by a third party approved housing body (AHB) to provide accommodation to persons experiencing homelessness. The purchase was made under the Capital Assistance Scheme (CAS) which is administered by the Council. The Dublin Region Homeless Executive (DRHE) is provided by the Council as the lead statutory local authority in the response to homelessness in Dublin. It adopts a shared service approach across South Dublin County Council, Fingal County Council and Dún Laoghaire-Rathdown County Council.

In a request dated 24 February 2022, the applicant sought access to records concerning a specified property. The FOI request, comprising three parts, was for records used in support of statements made by the DRHE in a letter dated 19 April 2021 that;

• the property was used as a hotel/bed and breakfast in the past, and
• a change of use permission would not be required to provide an emergency accommodation facility at the location.

The third part was for records held by the DRHE concerning the property for the period from 3 February 2020 to 24 February 2022.

In a decision dated 23 March 2022, the Council part-granted the applicant-�s request. It refused records relating to the first part of the request under section 15(1)(a) of the Act on the ground that no relevant records exist. It granted access to one record relating to the second part. Of the 28 records it identified as coming within the scope of part 3, it granted access to one record and refused access to the remaining 27 under sections 36(1)(b) and 36(1)(c).

On 25 March 2022, the applicant sought an internal review of the Council-�s decision. On 13 April 2022, the Council affirmed its original decision. No reference was made to section 15(1)(a). On 14 April 2022, the applicant applied to this Office for a review of the Council-�s decision.

During the course of the review, in correspondence dated 12 August 2022, the Council made the decision to partially release a significant number of additional records to the applicant. It relied on sections 35(1)(a), 36(1)(a), 36(1)(b), 36(1)(c) and 37(1) of the FOI Act to withhold certain information from the records. Following the release of the records, this Office engaged with the applicant in respect of the review. By letter dated 18 August 2022, the applicant indicated that he wished the review to proceed within a defined scope, which is outlined below.

In light of the Council-�s submissions and the content of the records, the third party AHB was notified of the review and invited to make submissions in respect of the Council-�s position. A submission was subsequently received in which the organisation objected to the release of the records in question and supported the position of the Council.

I have now completed my review in accordance with section 22(2) of the FOI Act.  In carrying out my review, I have had regard to the correspondence between the Council and the applicant as outlined above and to the correspondence between this Office and both parties on the matter. I have also had regard to the submissions made by the AHB and to the contents of the records at issue. I have decided to conclude this review by way of a formal, binding decision.

Scope of Review

Following its decision to release additional records to the applicant, the Council provided a more detailed schedule which identified 40 records as coming within the scope of the request. This schedule included attachments as distinct records. Five of the 40 records were withheld in full, while the remaining 35 were part-granted on the basis of sections 35(1), 36(1)(a), 36(1)(b), 36(1)(c) and 37(1) of the FOI Act.

In a letter dated 18 August 2022, the applicant wrote to this Office confirming the scope of the review following release of the additional records. He is not seeking a review in respect of the first part of his FOI request. He is seeking a review of the second part, namely whether records exist to support the statement made concerning a change of use permission. As such, section 15(1)(a) of the FOI Act is of relevance.

In respect of the records included in the schedule, he indicated that he is seeking a review of decisions made in respect of the following: records 2.3, 11, 15, 16, 17, 18, 19, 20, 21, 23, and 24.2. He also indicated that he was not seeking a review of the Council-�s reliance on section 37(1) to redact certain information from a number of the records.

During the course of the review, a question arose as to whether the Council-�s reliance on section 36(1)(a) in respect of record 2.3 was within scope. If the applicant accepted this aspect of the decision, as initially indicated, the entire record would be outside the scope of the review. The applicant subsequently confirmed that he wished this part of the decision to be reviewed. Accordingly, this Office sought submissions from the Council in respect of same. The Council subsequently withdrew its reliance on this particular section. The record remains within the scope of the review by virtue of other exemptions claimed.

Accordingly, this review is concerned solely with whether the Council was justified in refusing access to the above 11 records, in whole or in part, on the basis of sections 35(1)(a), 36(1)(b), 36(1)(c) and in effectively refusing access to records relating to the second part of the applicant-�s request on the basis of section 15(1)(a) of the FOI Act.

Preliminary Matters                                                                        

I note that in its correspondence to the applicant informing him of its decision to release further records, the Council references doing so -�with the agreement of the OIC-�. For the avoidance of doubt, this Office had no role in the decision in question. While I may direct the release of records at the conclusion of a review, the referenced decision, to release further records while the review was in train, was the Council-�s alone. This Office did not provide any input in respect of that decision, other than to request that the Council keep this Office appraised of any decision so made.

I further note that the manner in which the Council engaged with this Office resulted in some unnecessary delays to the progress of the review. Issues arose in respect of schedules and records provided and this necessitated multiple clarifications. I would remind the Council that both this Office and the Central Policy Unit of the Department of Public Expenditure and Reform publish guidance in respect of the processing of FOI requests and I would urge that all decision-makers familiarise themselves with same.

Analysis and Findings

The records at issue

While I am obliged to give reasons for my decision, section 25(3) of the FOI Act requires me to take all reasonable precautions in the course of a review to prevent disclosure of information contained in an exempt record. This means that the extent to which I can describe the contents of the records is limited. However, I believe it would be useful to briefly outline the nature of the records in question.

Records 2.3, 11 and 24.2 are reports or summary documents relating to the property

which have been refused in full. Record 24.2 is an attachment to record 24 which the Council originally indicated was part-granted but was not provided to the applicant. Following queries from this Office, it subsequently said that this was an error and that it was refusing release on the grounds indicated in the schedule. I will consider the application of the relevant exemptions below. 

Records 15, 16, 17, 18 and 20 are forms relating to a CAS application. All have been part-granted, with financial and commercial information redacted.

Records 19, 21 and 23 comprise miscellaneous documents relating to a CAS application which have been part-granted, with financial information redacted.

Section 36 of the FOI Act has been applied to all of the relevant records. As such, I will consider its applicability first.

Section 36(1)(b)

Section 36(1)(b) provides for the mandatory refusal of a request if the record sought contains financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of the person in the conduct of his or her profession or business or otherwise in his or her occupation.

The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release. The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material financial loss or gain". The Commissioner takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.

The harm test in the second part of section 36(1)(b) is that disclosure of the information "could prejudice-� the competitive position of the person in the conduct of their business or profession. The standard of proof to be met here is lower than the "could reasonably be expected" test in the first part of the exemption. However, the Commissioner takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.

Submissions

The Council applied section 36(1)(b) to 10 records, nine of which have been part-granted and one of which has been refused in full. It argued that release of the information could impact -�current and future negotiations for the purchase of buildings by all public bodies or Approved Housing Bodies (AHBs)-�. Its position is that disclosure will prejudice current negotiations where AHBs and local authorities are attempting to acquire similar properties, units or sites. The Council said that the information contained in the records details valuations, projected costings and commercial information which is not in the public domain. Its position is that release of the information could undermine the competitive position of AHBs in future negotiations/projects and could result in the voluntary body achieving poorer value for money.

In its submission to this Office, the AHB said that all information relevant to the property is commercially sensitive as its disclosure would prejudice any current or future negotiations for properties identified as suitable for the provision of homeless services or social housing. It said that -�commercial sensitivity incorporates the reluctance of many stakeholders to accept homeless services in their areas-�. It said that release of the information could result in potential increases in asking prices that would otherwise be avoided. It said that its competitive position, as well as that of the State and taxpayer, will be prejudiced by disclosure as it will become increasingly difficult to secure properties at a price in line with market rates that are not prejudiced by confidential information being put into the public domain.

The applicant did not make substantive submissions in respect of the application of this exemption.

Analysis

The information withheld from records 15, 16, 17, 18, 19, 20, 21 and 23 comprises financial information relating to the price of the relevant property and related funding applications. I am not satisfied that its release could result in the harms outlined by the Council and the AHB. While the parties have identified harms they argue could arise, they have generally not, in my view, supported those arguments with a sufficient explanation of how such harms might arise from the release of the redacted information at issue in this case.

As noted at the outset, the property in question has already been purchased by the AHB through a State-funded scheme. It appears to me that the salient question is therefore whether release of the withheld information would cause harm to future endeavours to secure properties.

In essence, both the Council and the AHB argued that vendors could increase the price they are willing to accept if they know how much an AHB previously paid for a similar property or how much State funding an AHB could receive. I do not accept that argument. It seems to me that the sale price of any property is dependent upon a variety of factors such as location, state of repair, valuation, demand for the property etc. The disclosure of the price paid by an AHB for a specific property or the amount of funding received does not, in my view, mean that future vendors can expect to receive higher prices from AHBs than the property market dictates. I find that section 36(1)(b) does not apply to the information withheld from records 15, 16, 17, 18, 19, 20, 21 and 23.

Record 2.3 is a valuation report in respect of the relevant property which was conducted by a third party and dated March 2021. The record contains information in respect of the property in question as well as a number of other properties. It contains information in respect of a number of vacant possession sales and certain hotel investment evidence. The latter includes information in respect of the current tenants of those properties, their lease details and rental rates. While the parties have not made submissions in respect of other third parties, I am satisfied that certain parts of the record contain financial and commercial information which could prejudice the competitive position of those third party companies.

However, I am not satisfied that the release of valuation information in respect of the property in question could result in the harms envisaged by section 36(1)(b). In line with the analysis in respect of the purchase price, the valuation of a property is dependent upon a variety of factors such as location, state of repair, and market demand. The disclosure of the valuation for a specific property could not, in my view, be reasonably expected to result in the relevant harms.

Furthermore, I am not satisfied that the release of information in respect of certain vacant possession sales could result in the relevant harms. The properties in question have sold and, having reviewed the information contained in the record, I do not see how release could result in material financial loss or prejudice to the competitive position of any parties.  

I am satisfied that information in the record pertaining to leases held by third parties is commercially sensitive information. I find that section 36(1)(b) applies to the following parts of record 2.3:

Page 6 -� -�Titles and Tenure-� section

Pages 12, 18 and 19

Page 21 -� third paragraph and bullet points

Page 22 - first two paragraphs and first four rows of table

Record 24.2 is a CAS appraisal summary prepared by the third-party AHB. The document includes information in respect of the organisation-�s structure and the property in question. The document also includes information taken from other records which have been part-granted but which do not come within the scope of this review. Having carefully reviewed the content of the record, I am not satisfied that release of the information could reasonably be expected to result in the harms outlined by the parties. The majority of the information is either high-level, publically available or has already been released to the applicant in other records. This is with the exception of the following information, relating to third party commercial entities, which I find does meet the requirements of the exemption at section 36(1)(b): paragraph 3, page 3 and paragraph 4, page 15.

While I accept that the remaining information in the above record relates to the financial and commercial dealings of the third party AHB, this Office generally distinguishes between the public interest in disclosing information which relates purely to the business of a third party and information which relates to the activities of the FOI body, e.g. the use of State resources. Where the information of a third party and an FOI body overlap, this Office aims to strike a balance between ensuring openness on the part of an FOI body and limiting the impact of disclosure on the affairs of the third party. In this particular regard, I wish to make it clear that while I accept that AHBs operate in commercial spheres, I would nonetheless distinguish them from truly private enterprises. Regardless, I am not satisfied that the remaining information in the record could reasonably be expected to cause the harm outlined. As such, I find that section 36(1)(b) applies to record 24.2 in part.

As I have found section 36(1)(b) to apply to parts of records 2.3 and 24.2, I must go on to consider other provisions of section 36 which subsection (1) is subject to. I am satisfied that none of the conditions specified in section 36(2) apply.

Section 36(3) provides that the exemption in section 36(1) does not apply in relation to a case where, in the opinion of the FOI body, the public interest would, on balance, be better served by granting than by refusing to grant the FOI request.     

In its submissions to this Office, the Council provided limited information in respect of the factors it considered in undertaking the public interest balancing test. It says that it believes the public interest has been met by the release of records to date. It says that disclosure could prejudice the competitive positions of the relevant organisations.

In its submissions, the third party AHB says that it is in the public interest that the state meets its responsibilities in respect of providing access to accommodation for people experiencing homelessness.

This Office recognises that there is a public interest in protecting the commercially sensitive information of third parties, and also accepts that there is a legitimate public interest in persons being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result. While the FOI Act was designed to increase openness and transparency in the way in which FOI bodies conduct their operations, the view of this Office is that, in general terms, it was not designed as a means by which the operations of private enterprises were to be opened up to scrutiny. In attempting to strike the balance between openness on the one hand and the need to protect commercially sensitive information on the other, it is legitimate to consider two things, namely the positive public interest which is served by disclosure, and the harm that might be caused by disclosure.

In this case, and in respect of records 2.3 and 24.2, I note that the information in question relates to third party commercial entities who are not parties to the property transaction which is the subject of the relevant FOI request. I consider that any public interest in the disclosure of this information is outweighed by the public interest in protecting commercially sensitive information relating to third party organisations. I find that the relevant parts of records 2.3 and 24.2 are exempt from release under section 36(1)(b) of the FOI Act. 

Section 36(1)(c)

Section 36(1)(c) provides that access to a record must be refused where the disclosure of information contained in the record could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates. While the standard of proof required to meet this exemption is relatively low, I would expect that a person seeking to rely on it would be able to show that contractual or other negotiations were in train or reasonably foreseen and explain how exactly disclosure could prejudice the conduct or outcome of such negotiations.

The Council has applied section 36(1)(c) to 10 records, eight of which have been part-granted and two of which have been refused in full. I have already found certain information within record 2.3 to be exempt under section 36(1)(b). Accordingly, I will consider the application of section 36(1)(c) to the remaining information in that record. 

Submissions made by the Council and the third part AHB in respect of section 36(1)(c) are similar to those made in respect of subsection (b) and referenced above. The Council says that release of the information could -�inadvertently inform the property market and affect future acquisitions that Approved Housing Bodies wish to consider to alleviate this region-�s homelessness situation-�. The AHB says that disclosure would mean it was -�forced to show its hand in a market where others do not-� and that it and the State would be placed in a -�prejudiced and disadvantaged position-� in respect of securing properties. 

As noted above, records 2.3, 15, 16, 17, 18, 19, 20, 21 and 23 contain withheld financial information relating to the valuation and price of the relevant property and funding applications in respect of same. While I accept that future negotiations in respect of other property transactions are likely to occur, the Council must also demonstrate that such negotiations could be prejudiced by the release of the information in question. It has provided limited submissions in this regard. As I have noted above, the withheld information in the records is specific to this property and sale and necessarily takes into account the condition and value of the property as well as market trends. I fail to see how releasing information in respect of a particular property could prejudice future negotiations.

Record 11 is an architect report undertaken by the Council. It contains information relating to the design and layout of the property. The document includes information taken from other records which have been part-granted but which do not come within the scope of this review. Neither the Council nor the third party AHB have made specific submissions in respect of record 11. Having carefully considered its contents, I cannot see how release could reasonably result in the harm outlined in section 36(1)(c). The document very specifically relates to the property in question and I do not accept that release would prejudice future negotiations in respect of other properties. I have also considered whether release could prejudice negotiations in respect of contracting work which may be required in respect of the property itself. While the record includes information in respect of recommended works, much of this detail is high-level and has been released to the applicant in other part-granted records.

Accordingly, I find that the Council was not justified in relying on section 36(1)(c) to withhold information in records 2.3, 11, 15, 16, 17, 18, 19, 20, 21 and 23.

Section 35(1)(a)

The Council has also relied on section 35(1)(a) of the FOI Act in refusing the release of record 2.3, the valuation report. I have already found certain information within record 2.3 to be exempt under section 36(1)(b). Accordingly, I will consider the application of section 35(1)(a) to the remaining information in that record. 

Section 35(1)(a) of the FOI Act applies to a record containing information given to an FOI body in confidence. Four requirements must be satisfied for a record to be exempt under section 35(1)(a): the information was given to an FOI body in confidence; the information was given on the understanding that it would be treated by the FOI body as confidential; disclosure of the information would be likely to prejudice the giving to the body of further similar information from the same person or other persons; and it is important to the body that such further similar information should continue to be given to the body. All four requirements must be satisfied for a record to be considered exempt. 

Section 35(1)(a) does not apply where the public interest would, on balance, be better served by granting than by refusing to grant the FOI request (see section 35(3)).

The Council made limited submissions in respect of the application of this section to the specific record in question. It says that the report was marked as prepared for the sole use of a third party FOI body.

The third party AHB says that the information was provided to the Council in confidence and on the understanding that it would be treated as confidential. It says that such discussions are -�carried out in the strictest confidence to ensure that commercially sensitive information does not find its way into the public domain-�. It again says that failure to maintain confidence could result in potential increases in asking prices. Its position is that disclosure would lead to a situation where information linked to acquisitions would -�continuously be released into the public arena risking an avoidable inflation of asking prices-�.

As confirmed by the Council and noted above, the property in question has been purchased. I accept that it may have been the case that the valuation information was submitted in confidence at the time that negotiations in respect of the purchase were ongoing. However, I do not accept that the release of the information at this time would be likely to prejudice the giving of further similar information to the Council. I would also note that release of the record does not mean that all such valuation reports warrant release under the FOI Act. Rather, the application of the exemption must be determined in respect of the specific record and taking into consideration such factors as the timing of the request.

In respect of the Council-�s position that the document was prepared in confidence for another FOI body, I note that the Council currently holds the report and was seemingly provided with same as part of its role in the property purchase.

Having carefully reviewed the record and in light of the above analysis, the Council has not satisfied me that the requirements of section 35(1)(a) have been met. Accordingly, I find that section 35(1)(a) of the FOI Act does not apply and that the Council was not justified in refusing access to the record on that basis. As I have found that section 35(1) does not apply, I do not need to consider the public interest test at section 35(3).

Section 15(1)(a)

The second part of the applicant-�s request concerns records used in support of a statement made in a letter between the DRHE and the third party AHB dated 19 April 2021. The statement in question relates to whether a change of use permission would be required in respect of the relevant property. In its original decision, the Council released a record in response to this part of the request. The record in question is a planning decision dated 1 November 2021. The applicant-�s position is that the Council misinterpreted his request and that it would not be possible for the DRHE to use a record that was not in existence at the time in support of the statement. The Council did not address this position in any further correspondence with the applicant. Accordingly, section 15(1)(a) is relevant to this review.

Section 15(1)(a) of the FOI Act provides that a request for access to records may be refused if the records sought either do not exist or cannot be found after all reasonable steps to ascertain their whereabouts have been taken. The Commissioner-�s role in such cases is to review the decision of the FOI body and to decide whether the decision was justified. This Office must have regard to the evidence available to the decision maker in arriving at his/her decision. The evidence in -�search-� cases generally consists of the steps actually taken to search for the records along with miscellaneous other information about the record management practices of the FOI body, insofar as those practices relate to the records in question.

This Office sought focused submissions from the Council in respect of searches undertaken. The Council-�s position is that the records requested do not exist. It says that the letter referenced was drafted following a brief telephone conversation between the DRHE and the Planning Section. It says that records do not exist in respect of the discussion, nor did they ever exist. It says that the DRHE -�is not involved in planning grants or refusals and does not hold records in relation to planning applications and decisions-�.

Notwithstanding the above position, the Council also provided details of the steps it took to search for relevant records. It says that it searched shared drives, personal folders, personal emails and hard-copy files and folders. It says that shared drives and filling cabinets were also searched for any possible misfiling. It says that DRHE management and staff were consulted.  

The above information was provided to the applicant. In response, he raised a number of queries relating to the Council-�s policies for documenting phone calls and outlined the type of records which may exist. I am satisfied that such queries were covered by the questions posed by this Office in its request to the Council for focused submissions.

The Council says that the correspondence between the DRHE and the third party AHB -�conveys no more than [the DRHE-�s] understanding of the planning situation based on a phone conversation-�. The FOI decision maker is the same individual who signed the letter at issue and undertook the relevant phone call. I am satisfied that they are best placed to comment on the existence or otherwise of any records of that phone conversation.

Having reviewed the submissions made by both parties, I have no reason to dispute the Council-�s position that no records relevant to this part of the applicant-�s request exist or ever existed. It is important to note that a review by this Office is not concerned with access to records that a requester believes ought to exist. I am satisfied from the Council-�s submissions that, in the circumstances, it has taken all reasonable steps to look for relevant records. I find that section 15(1)(a) applies.

Summary of Findings

In summary, I find that the Council was not justified in refusing access to certain records or parts of records. I direct the release of the following records,subject to the redaction of personal information therein, as agreed with the applicant: records 11, 15, 16, 17, 18, 19, 20, 21 and 23, and records 2.3 and 24.2 apart from the specific sections I have found to be exempt, namely:

Record 2.3:

Page 6 - -�Titles and Tenure-� section

Pages 12, 18 and 19

Page 21 - third paragraph and bullet points

Page 22 - first two paragraphs and first four rows of table

Record 24.2:

Page 3 - paragraph 3

Page 15 - paragraph 4

Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby vary the Council-�s decision. I find that the Council was justified in refusing access to certain information and records on the basis of section 15(1)(a) and 36(1)(b) of the FOI Act and I find that the public interest, on balance, does not favour their release. I find that the Council was not justified in refusing access to other records on the basis of sections 35(1)(a), 36(1)(b) and 36(1)(c). I direct their release, subject to the redaction of personal information.  

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 by the applicant not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.

Senior Investigator
Stephen Rafferty