University College Cork v The Information Commissioner
| Jurisdiction | Ireland |
| Judge | Mr Justice Garrett Simons |
| Judgment Date | 03 April 2019 |
| Neutral Citation | [2019] IEHC 195 |
| Court | High Court |
| Docket Number | 2018 No 12 MCA |
| Date | 03 April 2019 |
IN THE MATTER OF THE FREEDOM OF INFORMATION ACT 2014 IN THE MATTER OF AN APPEAL PURSUANT TO SECTION 24 OF THE FREEDOM OF INFORMATION ACT 2014 AND ORDER 130 AND ORDER 84C OF THE RULES OF THE SUPERIOR COURTS
[2019] IEHC 195
2018 No 12 MCA
THE HIGH COURT
Disclosure – Financial information – Point of law – Appellant seeking to appeal to the High Court on a point of law – Whether a clear error of law was established
Facts: The appellant, University College Cork (UCC), appealed to the High Court on a point of law pursuant to s. 24 of the Freedom of Information Act 2014. The underlying dispute between the parties centred on whether certain financial information contained in a finance contract (in effect, a loan agreement) between the European Investment Bank and UCC was exempt from disclosure on the basis that its disclosure could prejudice the competitive position of UCC. The information related to matters such as existing credit facilities between UCC and other financial institutions, the rate of interest payable under the finance contract and certain financial covenants to be observed by UCC as borrower.
Held by Simons J that the decision of the respondent, the Information Commissioner, exhibited a number of errors of law, and that those errors were material. In particular, Simons J held that the impugned decision (i) mistakenly took as its starting point a presumption in favour of disclosure which required UCC to justify the refusal of access, and (ii) misinterpreted and/or misapplied the threshold for the “competitive prejudice” exemption under s. 36(1)(b) of the 2014 Act.
Simons J held that the fact that the Information Commissioner concluded—erroneously—that the records did not fall within s. 36(1)(b) meant that the separate question under s. 36(3) of whether the public interest was in favour of disclosure was not considered; the public interest test had only been applied in respect of the third party information. Simons J proposed, therefore, to remit the matter to the Information Commissioner to reconsider and to decide in light of the findings set out in this judgment.
Appeal allowed.
This matter comes before the High Court by way of a statutory appeal pursuant to section 24 of the Freedom of Information Act 2014 (‘ FOI Act 2014’). The underlying dispute between the parties can be shortly stated. The dispute centres on whether certain financial information contained in a finance contract (in effect, a loan agreement) between the European Investment Bank and University College Cork is exempt from disclosure on the basis that its disclosure could prejudice the competitive position of the University. The precise nature of the information is described under the next heading below. For present introductory purposes, it is sufficient to note that it relates to matters such as existing credit facilities between UCC and other financial institutions; the rate of interest payable under the finance contract; and certain financial covenants to be observed by UCC as borrower.
The form of appeal stipulated under section 24 of the FOI Act 2014 is an appeal on a point of law. In order for an appeal to succeed, there must be a clear error of law established. It is not sufficient that this court might have reached a different decision on the merits. (See F.P. v. Information Commissioner [2019] IECA 19, [73]). Rather, it is necessary for UCC, as the appellant, to persuade this court that there has been an error of law on the part of the Information Commissioner.
For the reasons explained hereinafter, I am satisfied that the Information Commissioner's decision exhibits a number of errors of law, and that these errors are material. In particular, the impugned decision (i) mistakenly takes as its starting point a presumption in favour of disclosure which required UCC to justify the refusal of access, and (ii) misinterprets and/or misapplies the threshold for the ‘competitive prejudice’ exemption under section 36(1)(b) of the FOI Act 2014.
In order to put the arguments of the parties into context, it may be useful to summarise, at this early stage of the judgment, the content of the records the subject of the request by RTÉ.
Section 25 of the FOI Act 2014 obliges the court to take all reasonable precautions to prevent the disclosure of information contained in an exempt record. Accordingly, the summary which follows will describe the content of the disputed parts of the records in general terms only. In reaching my conclusions in this case, I have, of course, had regard to the precise information contained in the records.
Record 1 consists of what is described as a ‘finance contract’ between the European Investment Bank (‘ EIB’) and University College Cork (‘ UCC’). The finance contract is, in effect, a loan agreement. This finance contract was executed by the parties in July 2016. The credit facility authorised under the finance contract is one hundred million euros, and is to be provided in respect of a development project at UCC consisting of the construction of new infrastructure, the extension of existing academic buildings, the refurbishment of several existing but out-of-date university facilities, the upgrading of ICT infrastructure and the acquisition and refurbishment of two existing student residences.
The position adopted by UCC for the purposes of the statutory appeal to the High Court is that it has no objection to the disclosure of the finance contract in the redacted form which had been provided to the Information Commissioner by the EIB on 27 November 2017. This is so notwithstanding that the initial decision of UCC, and its decision on internal review, had been to withhold the document in its entirety.
The existence of this redacted version of the finance contract makes it possible to identify with precision the information which it is sought to exempt from disclosure. More specifically, the court has had the opportunity to carry out a ‘compare and contrast’ exercise between the redacted version and the full version of the finance contract (which has been made available to the court but not, obviously, to the notice party). This exercise has allowed this court to pinpoint the information in dispute. Crucially, the Information Commissioner—in reaching the impugned decision—also had the benefit of both the redacted and non-redacted version of the finance contract. Notwithstanding this, the Information Commissioner failed to have proper regard to this material in reaching the impugned decision.
The form and the content of the finance contract are typical of what an Irish lawyer would expect to find in a commercial loan agreement. This is not surprising given that the governing law of the contract is English law, which is broadly similar to Irish commercial law in this regard. The finance contract addresses matters such as the amount of the loan; the rate of interest; payments; the borrower's undertakings and representations; security; charges and expenses; and events of default.
One of the striking features of this case is how little information it is sought to exempt from disclosure. The finance contract runs to in excess of fifty closely-typed pages, yet the redactions run to approximately twenty lines. The first item which is redacted is the ‘Final Availability Date’. As appears from Article 1 of the finance contract, this date delimits the period during which disbursement requests can be made in respect of the loan tranches. Disclosure of this date would make known the effective period of the finance contract.
The next number of redactions (at pages 13 and 14 thereof) relate to the appraisal fee; the non-utilisation fee; and the rate of interest. These are all, self-evidently, commercially sensitive.
The next redaction relates to the disposal of assets by the borrower. Article 6 stipulates that UCC, as borrower, shall not dispose of all or any part of its business, undertaking or assets without the prior written consent of the EIB. This is subject to certain exemptions. The redaction relates to the conditions upon which UCC may dispose of assets for fair market value and at arm's length.
Article 6.11A stipulates certain financial covenants in respect of the ‘Annualised Service Cost’ and other metrics. As explained by counsel for UCC at the hearing, these include financial covenants in respect of net indebtedness parameters.
Article 10 defines ‘Events of Default’. The threshold applicable to defaults in respect of loans other than the loan the subject-matter of the finance contract has been redacted.
There are further redactions in relation to the ‘Form of Compliance Certificates’ in Schedule C of the finance contract, but these simply replicate the provisions that have previously been specified in relation to financial covenants under Article 6.11A.
Finally, it should be noted that there are a number of additional redactions which relate to the position of third parties, i.e. parties other than UCC and the EIB. The Information Commissioner accepts that this third party information is exempt from disclosure under section 36(1)(b) of the FOI Act 2014. There is also a further set of redactions which relate to personal information, and the Information Commissioner accepts that this information is exempt under section 37 of the FOI Act 2014. There is no need, therefore, to refer to either of these ‘agreed’ categories again in this judgment.
(For the avoidance of any doubt, I should make it clear that the entirety of the material in relation to these third parties is to be redacted, i.e. the redaction is not confined simply to the names of the third party companies...
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