Minister for Communications Energy and Natural Resources v Information Commissioner

 
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[2017] IEHC 222

THE HIGH COURT

Noonan J.

[2015 No. 394 MCA]

IN THE MATTER OF THE FREEDOM OF INFORMATION ACT 2014

BETWEEN
THE MINISTER FOR COMMUNCIATIONS,
ENERGY

AND

NATURAL RESOURCES
APPELLANT
AND
THE INFORMATION COMMISSIONER
RESPONDENT
AND
GAVIN SHERIDAN
FIRST NOTICE PARTY
AND
E-NASC EIREANN TEORANTA (TRADING AS ‘ENET’)
SECOND NOTICE PARTY

Administrative and Constitutional law – The Freedom of Information Act 2014 – Disclosure of public information Public interest test – Reasoned decision

JUDGMENT of Mr. Justice Noonan delivered on the 6th day of April, 2017
1

This matter comes before the court by way of appeal on a point of law pursuant to s. 24(1) of the Freedom of Information Act 2014 (‘the 2014 Act’). The appellant (‘the Minister’) brings the appeal against a decision of the respondent (‘the Commissioner’) dated 30th November, 2015. The first notice party (‘Mr. Sheridan’) was the original requester of the information the subject matter of this appeal, which information concerned the second notice party (‘enet’). enet did not participate in this appeal other than by way of submitting an affidavit which was filed by the Minister on his own behalf.

Background Facts
2

The State is the owner of an infrastructure of fibre optic cables in towns and cities throughout the country which are known as ‘metropolitan area networks’ (MANs). The MANs enable telecoms operators who do not possess their own infrastructure to utilise the MANs to provide services such as telephone and broadband to their customers. Such operators access the MANs on commercial terms. Following a tendering process instigated by the Minister, enet was awarded a concession with the State to maintain, manage and operate the MANs. The terms of this concession are embodied in a written agreement entered into in 2009 between the Minister and enet. On foot of this agreement, enet operates as a wholesaler of access to the MANs selling services to retail telecoms operators. The MANs constitute an important State owned asset.

3

On 2nd January, 2015, Mr. Sheridan made a Freedom of Information request to the Minister for access to four categories of records. The fourth record is the concession agreement. No issue arises any longer in relation to the first three records so this appeal is concerned solely with the concession agreement.

4

On the 14th January, 2015, the Minister wrote to enet to advise it of Mr. Sheridan's request. The letter noted that s. 38 of the 2014 Act required the Minister to consult with enet as a third party to whom the record sought related. The Minister said that the records were being considered in accordance with ss. 35 and 36 concerning confidential information and commercially sensitive information respectively and noted that both sections required the undertaking of a public interest test to determine if the records should be released. The letter went on to say:

‘My preliminary view in this matter is that the public interest would on balance be better served by granting the requester the information rather than refusing it unless there are objective reasons to the contrary.’

5

enet replied on 3rd February, 2015. It submitted that the records should not be released on the grounds that they were commercially sensitive and the public interest did not favour release. The letter made a legal submission in the context of previous decisions of the Commissioner. However, the letter provided no specific information as to how the concession agreement ought to be regarded as commercially sensitive. It stated that release of the agreement might provide an incomplete picture of the relationship between the Minister and enet.

6

The Minister communicated his decision to Mr. Sheridan by letter of 16th February, 2015. The letter cited both ss. 35 and 36. It noted that a duty of confidence exists between the parties to the concession agreement being the Minister and enet. Release of the agreement would be a breach of this duty of confidence. The letter makes no reference to the requirement to consider the public interest under s. 35(3) or whether s. 35(1) applied at all having regard to the terms of s. 35(2) to which I will refer further.

7

Having cited s. 36, the Minister's letter went on to state:

‘enet has an obligation to manage, moreover, maintain and operate the MANs on behalf of the State. The release of the concession agreements and any matters pertained to these agreements could have a negative impact on the ability of enet to continue the business of managing the MANs on behalf of the State in a competitive environment and could result in a material financial loss to the company.’

8

That appears to be the extent of the Minister's consideration of the commercial sensitivity of the concession agreement in issue. Of note, the Minister's decision makes no reference of any kind to the requirement to consider the public interest under both ss. 35 and 36. This is in contrast to the Minister's preliminary decision that the public interest required the disclosure of the information. No reason is given for departing from that preliminary view.

9

Mr. Sheridan appealed this decision to the Commissioner. On 12th May, 2015, the Commissioner wrote to the Minister asking for submissions in relation to the matter. In the course of that letter, the Commissioner said:

‘It is important to note that s. 22(12) (b) of the Freedom of Information Act places the onus on the public body of satisfying the Commissioner that its decision to refuse to grant a request was justified. Therefore, failure to justify a claim for exemption may lead to a decision by a Commissioner to release the records at issue.’

The Minister replied on 26th May, 2015, and in the course of an email of that date said:

‘In effect, this will amount to penalising the company for transacting business with the State. It could also act as a disincentive to any future potential bidders for the MSC contracts, i.e. knowing that all of their commercial dealing is liable to end up in the public domain.

The release of the contract details would also undermine the State's ability to negotiate similar types of contract in the future and could undermine the State's negotiation future tender process.’

10

On 28th July, 2015, the Commissioner wrote by email to the Minister seeking clarification of how the release of the records would harm enet's commercial position. The Minister replied on 30th July, 2015, saying:

‘If enet's commercial details were to be published, it would place them at a disadvantage with both their customers and competitors – i.e. both would know enet's costs and prices. The disclosure of this information would undermine enet's business.’

11

On 24th August, 2015, enet made further submissions to the Commissioner attaching the agreement and highlighting the areas that they viewed as being the most commercially sensitive and which they argued should be rejected. The email continued:

‘I would reiterate that we would still see the entire contract as commercially sensitive and had previously understood that it would remain confidential as intended under the confidentiality clause contained within the agreement. As outlined previously, the disclosure of commercially sensitive information could impact our business adversely from a number perspectives and could result in financial loss to the company.

enet operates in the wholesale market, which is very competitive and our competitors are operators such as Eircom and BT offer similar services to enet (over the networks that they own). Any commercially sensitive information that is disclosed which pertains to enet's business model could result in our competitors being better positioned to compete against enet and could also result in our customers requesting price reductions thereby adversely impacting in its ability to earn a commercial return.’

12

The Commissioner made his decision on 27th November, 2015, and it was communicated to the Minister on 30th November, 2015.

The Commissioner's Decision
13

In dealing with preliminary matters, the Commissioner said:

‘Before I consider the exemptions claimed, I wish to make four general points. First, s. 22 (12) (b) of the FOI Act provides that when I review 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 me that its decision is justified …’

14

This statement is one to which the Minister has taken exception in this appeal for reasons which I will explain further.

15

In dealing with the scope of the review, the Commissioner noted that Mr. Sheridan had agreed to exclude schedule 3 to the Commission agreement from the review so that it did not arise for consideration.

16

Dealing with s. 36, the Commissioner said:

‘Having considered these submissions and having examined the record at issue, I am not satisfied that the first limb of s. 36(1) (b) applies. The parties have not demonstrated to my satisfaction that there is a “reasonable expectation” of “material loss” accruing to the third party.’

17

In respect of the second limb of s. 36(1) (b) the Commissioner found that it did apply i.e. that enet's competitive position could be prejudiced, and...

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