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'K' and Australian Securities and Investments Commission [2013] AICmr 22 (13 March 2013)

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Decision and reasons for decision of Acting Freedom of Information Commissioner, Toni Pirani

Summary of case details
Applicant:

'K'

Respondent: Australian Securities and Investments Commission

Other parties:

Anonymous

Decision date: 13 March 2013
Application number: MR11/00306
Catchwords:

Freedom of information — Public interest conditional exemption — Business — (CTH) Freedom of Information Act 1982 s 47G

 

  Contents

 Summary

  1. I affirm the decision of the Australian Securities and Investments Commission (ASIC) of 5 September 2011 to grant access to documents requested under the Freedom of Information Act 1982 (the FOI Act).

 Background

  1. On 2 May 2011, the FOI applicant applied to ASIC for access to documents relating to the professional indemnity insurance policy maintained by the applicant ('K') in this IC review (a holder of an Australian Financial Services Licence).
  2. On 15 June 2011, ASIC consulted the applicant under s 27 of the FOI Act in relation to two documents falling within the scope of the request. In particular, ASIC offered the applicant the opportunity to make submissions that the documents were exempt documents under s 47G of the FOI Act.
  3. On 23 June 2011, the applicant made submissions that the documents sought by the FOI applicant were exempt documents under ss 38 and 47G of the FOI Act.
  4. On 1 July 2011, ASIC advised the applicant that it had decided to release the two documents to the FOI applicant.
  5. On 13 July 2011, the applicant sought internal review of ASIC's decision to release the documents. If ASIC maintained its view that the documents were not exempt, the applicant asked that they be edited to remove the details of the insurer and the value of the policy under s 22 of the FOI Act before the documents were released.
  6. On 5 September 2011, ASIC affirmed its decision to release the documents.
  7. By letter dated 21 September 2011, the applicant sought IC review of this decision under s 54M of the FOI Act.

 Decision under review

  1. The decision under review is ASIC's decision of 5 September 2011 to grant access to two documents sought by the FOI applicant.

 The business exemption (s 47G)

  1. Section 47G of the FOI Act provides:

    Public interest conditional exemptions-business

    1. A document is conditionally exempt if its disclosure under this Act would disclose information concerning a person in respect of his or her business or professional affairs or concerning the business, commercial or financial affairs of an organisation or undertaking, in a case in which the disclosure of the information:
      1. would, or could reasonably be expected to, unreasonably affect that person adversely in respect of his or her lawful business or professional affairs or that organisation or undertaking in respect of its lawful business, commercial or financial affairs; or

    ...

  2. The Australian Information Commissioner has issued Guidelines under s 93A to which regard must be had for the purposes of performing a function, or exercising a power, under the FOI Act.[1] With regard to the exemption under s 47G the Guidelines state:

    6.161 The operation of the business information exemption depends on the effect of disclosure rather than the precise nature of the information itself. Nevertheless, the information in question must have some relevance to a person in respect of his or her business or professional affairs or to the business, commercial or financial affairs of an organisation or undertaking (s 47G(1)(a)).

    ...

    6.165 The test of reasonableness applies not to the claim of harm but to the objective assessment of the expected adverse effect. For example, the disclosure of information that a business's activities pose a threat to public safety may have a substantial adverse effect on that business but it may be reasonable in the circumstances to disclose it. Similarly, it would not be unreasonable to disclose information about a business that revealed unlawful conduct.[2] These considerations necessitate a weighing of a public interest (public safety) against a private interest (preserving the profitability of a business) but at this stage it bears only on the threshold question of whether the disclosure would be unreasonable.

    6.166 The AAT has distinguished between 'truly government documents' and other business information collected under statutory authority. The first category includes documents that have been created by the administration or that form part of a flow of correspondence and other documents between the administration and business. The AAT concluded that such documents inclined more to arguments favouring scrutiny of government activities when considering whether disclosure would be unreasonable.[3] By implication, the exemption is more likely to protect documents obtained from third party businesses.

  3. The applicant states that the documents relate to professional indemnity insurance obtained in the normal course of its commercial and financial affairs. It says that under s 13 of the Insurance Contracts Act 1984 (Cth), contracts of insurance are based on the obligation of utmost good faith and this is an implied term of insurance contracts. The applicant states that disclosure of details of its contracts, including arrangements with its insurer, would be contrary to its obligations under the terms of its insurance policies.
  4. The applicant also submits that the documents under review would not be discoverable in legal proceedings and therefore disclosure would be contrary to the objects in s 3 of the FOI Act.
  5. While the applicant says that disclosure of documents relating to its insurance arrangements may affect it adversely in respect of its lawful business, commercial or financial affairs, or alternatively, those of its insurer, it has not identified how it would be adversely affected.
  6. Section 55D(2) of the FOI Act provides that, in an application for IC review of an access grant decision, the IC review applicant has the onus of establishing that I should make a decision adverse to the person who made the request.
  7. To decide that the documents are exempt under s 47G, I must be satisfied that disclosure would, or could reasonably be expected to, unreasonably affect the applicant in the conduct of its business affairs.
  8. The applicant has not identified any harm that might reasonably flow from disclosure of the documents. I do not consider its obligation to act in good faith with respect to its insurance policies would be adversely affected by the lawful disclosure of its insurance policies under the FOI Act. I note that the policies under review expired on 6 February 2007 and 23 January 2004. They are not policies under which the applicant has current obligations.
  9. Furthermore, as stated by ASIC, there is a statutory obligation for holders of Australian Financial Services Licences to hold professional indemnity insurance and for the details of that insurance to be provided to ASIC in accordance with statutory obligations under the Corporations Act 2001 (Cth). There is nothing confidential about this requirement.
  10. I do not consider that release of these documents is contrary to the objects of the FOI Act. Section 3 emphasises increased openness on the part of government and greater access to information held by government.
  11. Part 6.166 of the Guidelines indicates that business information collected under statutory authority is more likely to be covered by the business exemption in s 47G than a document created by the administration or which forms part of the flow of correspondence between government and business. Although the documents under review contain business information collected under statutory authority, I cannot identify any unreasonable adverse effect that would, or could reasonably be expected to, flow from disclosure of these documents.
  12. I do not consider that release of the documents under review would, or could reasonably be expected to, unreasonably affect the applicant in respect of its lawful business affairs.

 Findings

  1. The documents are not conditionally exempt under s 47G of the FOI Act.

 Decision

  1. Under s 55K of the FOI Act, I affirm ASIC's decision of 5 September 2011.

Toni Pirani
Acting Freedom of Information Commissioner

13 March 2013

Review rights

If a party to an IC review is unsatisfied with an IC review decision, they may apply under s 57A of the FOI Act to have the decision reviewed by the Administrative Appeals Tribunal. The AAT provides independent merits review of administrative decisions and has power to set aside, vary, or affirm an IC review decision.

An application to the AAT must be made within 28 days of the day on which the applicant is given the IC review decision (s 29(2) of the Administrative Appeals Tribunal Act 1975). An application fee may be payable when lodging an application for review to the AAT. The current application fee is $816, which may be reduced or may not apply in certain circumstances. Further information is available on the AAT's website (www.aat.gov.au) or by telephoning 1300 366 700.


[1] Office of the Australian Information Commissioner, Guidelines issued by the Australian Information Commissioner under s 93A of the Freedom of Information Act 1982.

[2] Searle Australia Pty Ltd v Public Interest Advocacy Centre and Department of Community Services and Health (1992) 108 ALR 163.

[3] Re Actors' Equity Association (Aust) and Australian Broadcasting Tribunal (No 2) [1985] AATA 69.