Prejudice to commercial interests

April 18th, 2018 by James Goudie KC

In Case No. EA/2017/0057, Hartlepool Borough Council v The Information Commissioner, the FTT was concerned with whether under FoIA Section 43(2) disclosure would or would be likely to prejudice the commercial interests of any party and if so whether the public interest in maintaining that exemption outweighs the public interest in disclosure. The FTT upheld the Commissioner’s Decision that the disputed information must be disclosed.  The Borough Council’s Appeal was dismissed.

The request was for information in relation to the transfer of ownership in 2003 of what was then Teesside International Airport (“TIA”).  TIA had been owned by 6 Tees Valley local authorities, including Hartlepool. In 2003, Peel Group reached an agreement with them to acquire a 75% shareholding in TIA.  TIA became Durham Tees Valley Airport (“DTVA”). The 6 local authorities retained a combined 25% shareholding in DTVA, with Peel Investments Limited, a wholly owned subsidiary of the Peel Group, being the majority shareholder. The aggregate shareholding of the 6 local authorities in DTVA is currently 11%.

Details were requested of that transfer of ownership and any consideration paid directly by Peel and any irrevocable commitments, e.g. in the form of deferred consideration, entered into by Peel, also details of any third party commitments made by the Government Agency, One North East, that facilitated the transfer of ownership.

The FTT found that disclosure would not and would not be likely to prejudice the commercial interests of the Council or of Peel.  The FTT said:-

“54.  … While we accept that negotiations for redevelopment of the airport are ongoing, Peel has not shown how information dating back to 2003 in relation to a specific project in a specific economic climate, would cause prejudice to such negotiations 15 years later.

55.  The Commissioner had highlighted the need for a much greater level of specificity. Peel’s response that it does not consider the Commissioner’s request for a more “granular explanation” is reasonable, misses the point. The need for the explanation does not arise from the Commissioner’s request. It arises because the onus rests with the party making the assertion that the exemption is engaged to make good its claim. …

56.  For Peel to say that it is not reasonable to have to provide a more granular explanation of the prejudice, given the breadth of the commercial interests in question, and the multiple ways in which prejudice to them could manifest, also misses the point. It does not need to show every possible way in which prejudice would or would be likely to arise. It is not even necessary to show that the extent of the prejudice would be significant. It is sufficient that “some commercial disadvantage” is likely to be suffered … However, it must show that disclosing the information would have “a very significant and weighty chance” of causing prejudice that is “real, actual or of substance” …”

The FTT found that Section 43(2) of FoIA was not engaged. The public interest balance therefore did not arise.  The FTT, however, observed:-

“62. The correct approach to the application of the public interest balancing exercise under section 2(2)(b) of FOIA, is set out in the Upper Tribunal’s decisions in APPGER v ICO and FCO [2013] UKUT 0560, Department of Health v Information Commissioner and Lewis [2015] UKUT 0159 (AAC) and Home Office v IC and Bingham Centre for the Rule of Law [2015] UKUT 0308 (AAC). The public interest balance must be undertaken by reference to specific public interest factors relating to the content of the information. This does not mean that generic factors are not relevant. However, the generic factors do need to be borne out by the particular information in issue.”

“64.  As Peel acknowledges, there is a clear public interest, in terms of greater public understanding and accountability, in information concerning ownership of the airport and its redevelopment, and in the financial decisions taken by the Council and other local authorities. We do not agree that it is solely for the local authorities to safeguard that public interest. It is self-evident that there is a public interest in decisions taken by the Council being transparent. That, in our view, is beyond dispute.”

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