Murtagh v. Federal Commissioner of Taxation.
Members:JD Davies J
Sir Ernest Coates M
RA Sinclair M
Tribunal:
Administrative Appeals Tribunal
J.D. Davies J. (President), Sir Ernest Coates and Mr. R.A. Sinclair (Members)
This is a review of a decision by an officer of the Australian Taxation Office refusing a request for access to documentation relevant to income tax assessments of the applicant.
The request for access dated 26 May 1983 read as follows:
``I hereby request under the Freedom of Information Act 1982, copies of all records relating to the assessment of my income tax returns for the financial years ending 30th June 1980, 1981, 1982.
The records requested include all documents in existence relating to the decisions taken with respect to my income tax assessments
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including department memoranda, reports, submissions, recommendations and general information.''
As some of the material sought related to an alleged partnership between Ms. Murtagh and Mr. X and the partnership return lodged in respect thereof, the consent of Mr. X to the disclosure of the information was sought. That was given by letter dated 16 June 1983, which read, inter alia:
``By this letter, I authorise you to make available to Miss Murtagh all documents requested by her relating to the Nareda Park partnership.''
On 23 June 1983, Ms. Murtagh was given access to a number of documents, but exemption was claimed with respect to the remainder. A letter to her of 23 June 1983 stated, inter alia:
``The remaining documents are considered to be exempt documents in that disclosure would reveal material in the nature of, or relating to, opinion, advice or recommendation obtained, prepared or recorded, or consultation or deliberation that has taken place, in the course of, or for the purposes of the deliberative purposes involved in the functions of the Commissioner of Taxation.''
Subsequently, an internal review was sought. The decision on the internal review, communicated to Ms. Murtagh by letter dated 14 July 1983, granted access to further documentation but claimed exemption with respect to some. The letter stated:
``As advised earlier the documents considered exempt are reports, submissions and inter-office memoranda prepared by officers dealing with your income tax affairs.''
An application for review by this Tribunal was lodged by Ms. Murtagh on 22 July 1983.
By the conclusion of the hearing of this review, the dispute was limited to certain documents which relate to the partnership returns and the applicant's personal returns for the years of income ended 30 June 1980, 1981 and 1982 and also to documents relating to an investigation by the Ombudsman, on Ms. Murtagh's complaint, with respect to the manner in which the Australian Taxation Office had dealt with her taxation affairs.
During the hearing, a question arose as to the jurisdiction of the Tribunal to consider documents which came into existence after the date of Ms. Murtagh's request for access, 26 May 1983. In our opinion, the Tribunal may make a decision with respect to documents which have come into existence after the date of the request for access provided that those documents are within the ambit of the decision under review, that is to say, that they raise no separate issue but are documents the access to which is established by the decision under review and the decision on review. Because of its function, the Tribunal must necessarily, from time to time, take account of facts which have come into existence after the date of the decision under review. Plainly, relevant documents will not always be only those documents which were in existence at the time of the making of the request for access. The original decision-maker may, and usually does, give a decision with respect to all documents within the category of the applicant's request which are known to be in the possession of the agency at the time of his decision. A decision on internal review may, and usually does, take into account all documents within the category of the applicant's request which are known to be in the possession of the agency at the time of that decision. Similarly, the Administrative Appeals Tribunal, provided that within its jurisdiction it is reviewing a decision to refuse access to documents, may give consideration to all documents which fall within the ambit of the dispute before it notwithstanding that some may have come into existence between the time of the decision under review and the time of the Tribunal's decision. Section 43 of the Administrative Appeals Tribunal Act 1975 (Cth.) specifically provides that:
``For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision....''
The Tribunal has been informed that the documents currently in dispute are those documents which are listed in the schedule to these reasons. The Tribunal has given consideration only to those documents. All such documents are within the ambit of the dispute before the Tribunal and, in our opinion, the Tribunal has jurisdiction to deal with them.
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THE FACTS
Before turning to the issues arising under the Freedom of Information Act 1982 (Cth.) (``the FOI Act 1982''), it is desirable to outline briefly the taxation issue between the applicant and the respondent.
A partnership return was lodged for the years ended 30 June 1980, 1981 and 1982 for the ``Nareda Park Stud''. The partnership, of which the applicant and Mr. X were said to be the partners, was alleged to have engaged in horse breeding and to have commenced operating on 1 July 1979. A horse trading account accompanying the partnership return for the 1980 year showed opening stock of 8 horses, the purchase of 1 and natural increase of 4. The account showed sales of 3 horses, 1 loss by death or missing and closing stock of 9. A small loss on horse trading was shown. An income and expenditure statement showed the loss on horse trading and expenditure on items such as agistment, labour, depreciation, etc., totalling in all a substantial loss for the year. The balance sheet as at 30 June 1980 showed that Mr. X had contributed a substantial amount of capital and that he shared one half of the loss. The applicant was shown to have contributed significant capital and to have shared in the loss. Plant and equipment, motor vehicles, sheds, shelters and ramps, saddlery and like equipment, comprised the assets of the partnership. Neither trading stock nor a bank account was shown in the balance sheet for the 1980 year, though they were shown in subsequent years.
The applicant's share of the 1980 loss was claimed by her in her personal return for the 1980 year. The deduction of that sum under sec. 92 of the Income Tax Assessment Act 1936 (Cth.) depends upon the calculation of the loss of the partnership in accordance with sec. 90 of the Income Tax Assessment Act.
We need not discuss the 1981 and 1982 returns.
On 24 February 1981, the Australian Taxation Office issued an adjustment sheet with respect to the 1980 partnership return, disallowing the whole of the loss claimed. The following information was given: ``Loss disallowed as activities for the period are considered not sufficient to constitute the carrying on of a business of primary production for income tax purposes''. That view of the Taxation Office subsequently found support in a report from a valuer who, on 23 July 1981, inspected the property on which the ``Nareda Park Stud'' conducted its activities and reported that the ``activities carried out to date appear more in the nature of an interest/passtime than an attempt to run a viable business of primary production''.
On 26 March 1981, the applicant's personal assessment issued disallowing the deduction claimed. An objection to the assessment was lodged on or about 31 March 1981 but, after receipt of the valuer's report in July 1981, the objection was disallowed.
Subsequently, on or about 19 November 1981, a request was lodged that the decision on the objection be referred to a Taxation Board of Review. That request was complied with during 1983. In the meantime, a further dispute had arisen because the applicant and her tax agent had interviewed an officer of the Australian Taxation Office and had apparently left the interview with the impression that the deduction claimed would be allowed though, in fact, it was not. It was arising from that discussion with the officer of the Australian Taxation Office and its aftermath that there was a complaint by the applicant to the Ombudsman, which complaint is still in the course of investigation.
It is not always a simple case to determine whether activities constitute a business. Activities may be so minuscule as to be incapable of constituting the carrying on of a business. In
Thomas v. F.C. of T. 72 ATC 4094; (1972) 46 A.L.J.R. 397, the growing of a few pine trees was considered not to have ``a significant commercial purpose or character'' (at ATC p. 4099; A.L.J.R. p. 401). See also Case R1,
84 ATC 101. But, in the applicant's case, it does not seem that the activities were so minuscule that they could not have constituted a business if the activities were carried on in a businesslike way and not by way of hobby. The relevant principles were stated by Bowen C.J. and Franki J. in
Ferguson v. F.C. of T. 79 ATC 4261 at pp. 4264-4265; (1979) 37 F.L.R. 310 at p. 314 as follows:
``There are many elements to be considered. The nature of the activities, particularly whether they have the purpose of profit-making, may be important. However, an immediate purpose of profit-making in a particular income year does not appear to be essential. Certainly it may be held a person is
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carrying on business notwithstanding his profit is small or even where he is making a loss. Repetition and regularity of the activities is also important. However, every business has to begin and even isolated activities may in the circumstances be held to be the commencement of carrying on business. Again, organization of activities in a business-like manner, the keeping of books, records and the use of system may all serve to indicate that a business is being carried on. The fact that, concurrently with the activities in question, the taxpayer carries on the practice of a profession or another business, does not preclude a finding that his additional activities constitute the carrying on of a business. The volume of his operations and the amount of capital employed by him may be significant. However, if what he is doing is more properly described as the pursuit of a hobby or recreation or an addiction to a sport, he will not be held to be carrying on a business even though his operations are fairly substantial. See generally,
Trautwein v. F.C. of T. (No. 2) (1936) 56 C.L.R. 196;
Tweddle v. F.C. of T. (1942) 7 A.T.D. 186;
Fairway Estates Pty. Ltd. v. F.C. of T. 70 ATC 4061; (1970) 123 C.L.R. 153; Thomas v. F.C. of T. 72 ATC 4094; (1972) 46 A.L.J.R. 397... in all of which cases it was held the taxpayer was carrying on business; and
Martin v. F.C. of T. (1953) 90 C.L.R. 470 in which it was held the taxpayer was not carrying on business.''
Thus, the issue in the applicant's taxation review is likely to turn upon the question whether the activities were carried on in a businesslike way as a commercial enterprise or whether, on the other hand, the applicant and Mr. X were merely pursuing a hobby or personal interest.
In determining this issue, it will be relevant to examine the partnership agreement, if any. Was it in the form of a written agreement? Was it recorded in an exchange of letters? Was it oral? What were its terms? It will be necessary to see whether a partnership bank account was maintained and, if so, how it was operated. It will be relevant to look at the agreement pursuant to which Mr. X's property was made available for the horse breeding activities. It will be relevant to ascertain whether the ``Nareda Park Stud'' in fact acquired plant and equipment, motor vehicles, sheds, shelters and ramps and saddlery and, if so, in what way that acquisition was achieved. It will be relevant to look at the moneys, if any, which passed between the applicant and Mr. X and the books of account which were kept. All these facts are within the knowledge of the applicant. The documents in issue do not disclose them.
Of course, there could be other questions arising in the review. Each of the deductions claimed in the partnership return could be the subject of consideration. Questions could arise as to whether particular plant was acquired or whether expenses were incurred and whether there should be an apportionment. All the facts relevant to these matters should be known to the applicant.
The applicant, on 26 May 1983, requested access to all documents relating to her personal individual and partnership returns of 1980, 1981 and 1982. After internal review, access was granted to all relevant documentation relating to the 1981 and 1982 individual returns and the 1981 partnership return, except for the deletion of the names of officers. Access to various documents relating to the 1980 partnership and individual returns was given. However, exemptions were claimed with respect to a number of documents. Since this decision, the issues have narrowed as indicated above.
THE EXEMPTIONS
(a) Section 36 - ``Internal Working Documents''
It was submitted by Mr. J.G. Santamaria, counsel for the respondent, that most of the documents in dispute are comprehended by sec. 36 of the FOI Act 1982. Section 36(1) reads:
``36(1) Subject to this section, a document is an exempt document if it is a document the disclosure of which under this Act -
- (a) would disclose matter in the nature of, or relating to, opinion, advice or recommendation obtained, prepared or recorded, or consultation or deliberation that has taken place, in the course of, or for the purposes of, the deliberative processes involved in the functions of an agency or Minister or of the Government of the Commonwealth; and
- (b) would be contrary to the public interest.''
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Also relevant is sec. 36(5) which is as follows:
``36(5) This section does not apply to a document by reason only of purely factual material contained in the document.''
To support an exemption under sec. 36(1), the two elements in para. (a) and (b) must be made out.
Deliberative Processes - Section 36(1)(a)
The term ``deliberative processes'' would seem to have a wide ambit. The term was considered by Beaumont J. in
Harris v. Australian Broadcasting Corporation (1983) 50 A.L.R. 551. At p. 560, his Honour said that:
``... `deliberation' suggests not only collective discussion but collective acquisition and exchange of facts preliminary to ultimate decision.''
This phrase was adopted from the judgment of Friedman A.J. in
Sacramento Newspaper Guild v. Sacramento County Board of Superiors (1968) 69 Calif. Reporter 480 at p. 485.
His Honour's decision and the operation of sec. 36(1) were considered in depth by the Tribunal in
Re Waterford and Department of the Treasury (No. 2) ((1984) ADMN ¶92-002). With respect to sec. 36(1), the Tribunal concluded,
``58. As a matter of ordinary English the expression `deliberative processes' appears to us to be wide enough to include any of the processes of deliberation or consideration involved in the functions of an agency. `Deliberation' means `The action of deliberating: careful consideration with a view to decision' (see The Shorter Oxford English Dictionary). The action of deliberating, in common understanding, involves the weighing up or evaluation of the competing arguments or considerations that may have a bearing upon one's course of action. In short, the deliberative processes involved in the functions of an agency are its thinking processes - the processes of reflection, for example, upon the wisdom and expediency of a proposal, a particular decision or a course of action. Deliberations on policy matters undoubtedly come within this broad description. Only to the extent that a document may disclose matter in the nature of or relating to deliberative processes does sec. 36(1)(a) come into play.
59. It by no means follows, therefore, that every document on a departmental file will fall into this category. Section 36(5) provides that the section does not apply to a document by reason only of purely factual material contained in the document (see, in this regard, the Full Court decision in Harris). See also sec. 36(6) relating to reports and the like. Furthermore, however imprecise the dividing line may first appear to be in some cases, documents disclosing deliberative processes must, in our view, be distinguished from documents dealing with the purely procedural or administrative processes involved in the functions of an agency. A document which, for example, discloses no more than a step in the procedures by which an agency handles a request under the FOI Act is not a document to which sec. 36(1)(a) applies.
60. It is documents containing opinion, advice, recommendations etc. relating to the internal processes of deliberation that are potentially shielded from disclosure - documents that might, perhaps, have been more aptly described in the headnote as `Internal Thinking Documents'. Out of that broad class of documents, exemption under sec. 36 only attaches to those documents the disclosure of which is `contrary to the public interest' (sec. 36(1)(b) of the FOI Act and cf. sec. 35, 36, 37(1)(b) and 37(2) of the Administrative Appeals Tribunal Act 1975).''
The intent of sec. 36(1)(a) can be seen from the provisions with which it is associated. Thus sec. 36(2) excludes ``matter that is used or to be used for the purpose of the making of decisions or recommendations referred to in subsec. 9(1)''. Section 9 requires that there be published, inter alia, ``manuals or other documents containing interpretations, rules, guidelines, practices or precedents...'' ``provided by the agency for the use of, or [which] are used by, the agency or its officers in making decisions or recommendations...''. Section 9(1) plainly comprehends the manuals and guidelines which are published by the Australian Taxation Office for the assistance of its officers when making decisions or recommendations with respect to such matters as assessments, objections to assessments and requests for reference. By excluding these documents, sec. 36(2) makes it clear that the
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preparation of such manuals is part of the deliberative processes to which sec. 36 turns its attention.Moreover, sec. 36(6) specifically excludes ``(c) the record of, or formal statement of the reasons for, a final decision given in the exercise of power or of an adjudicative function''. Such an exclusion would not be necessary if sec. 36(1) did not comprehend, in the deliberative processes of which it speaks, the processes of decision-making involved in the exercise of decision-making power under an enactment.
Thus, subsec. (2) and (6) demonstrate clearly that subsec. (1) is concerned both with decision-making processes and policy-making processes, while subsec. (5) makes plain that the section is not concerned to exempt purely factual material. As was said in
Environmental Protection Agency v. Mink, 410 U.S. 73 (1973) at p. 89, with respect to Exemption (b)(5) of the Freedom of Information Act (U.S.), the Courts have ``... recognised that it requires different treatment for materials reflecting deliberative or policy-making processes on the one hand, and purely factual, investigative matters on the other''. (Footnote omitted.)
The provision therefore has analogies to Exemption (b)(5). Nevertheless, American authorities with respect to Exemption (b)(5) must not be applied uncritically. Section 36 must be given effect, having regard to its own terms. The provision refers to all the deliberative processes involved in the functions of an agency or Minister.
The processes within the Australian Taxation Office leading to the exercise of the statutory power to make an assessment under sec. 166 of the Income Tax Assessment Act, to amend an assessment pursuant to sec. 170 thereof and to determine an objection under sec. 186 thereof are clearly deliberative processes for the purposes of sec. 36(1)(a).
Moreover, notwithstanding the absolute terms of sec. 189 of the Income Tax Assessment Act, the lodgment of a request for reference is taken by the Australian Taxation Office to be a further opportunity to review the case. Only a minority of the cases in respect to which a request for reference to a Taxation Board of Review is lodged are, in fact, referred to a Taxation Board of Review. If the matter is settled, an amended assessment is issued, although this step may not always accord well with the provisions in sec. 170 permitting amendment. Further, even after a matter has been referred to a Taxation Board of Review, the Australian Taxation Office may issue an amended assessment if settlement is reached with the taxpayer. Indeed, it is the practice of the Australian Taxation Office to issue an amended assessment if one is necessary to give effect to a decision of a Taxation Board of Review. The reservations expressed as to this practice by Dixon J. in
F.C. of T. v. West Australian Trustee Executor and Agency Company Limited (1929) 43 C.L.R. 20 at pp. 23-24 have not altered this practice. In R. v. Income Tax Special Commissioners (1936) 1 K.B. 487, it was held that once an appeal to the Special Commissioners of Income Tax had been lodged by a taxpayer, the taxpayer had no power to withdraw the appeal without the consent of the Special Commissioners and that the Special Commissioners were under a duty to review the assessment. At p. 504, Romer L.J. said:
``... I think that, once the procedure laid down in Part VII of the Act has been brought into being, the income tax payer has no power of preventing it from being carried out to its full effect, resulting, as it will, in the assessment being confirmed either in the amount originally assessed by the Additional Commissioners, or with some variation by way of increase or diminution.''
See also the remarks of C.F. Fairleigh Esq., Q.C., in Case H35,
76 ATC 297 at p. 303. However, notwithstanding the legislative structure, the practice of the Australian Taxation Office is, as Mr. R.J. Tomkins, Assistant Commissioner, pointed out in his evidence, to continue negotiations with the taxpayer even after the matter has been referred to a Taxation Board of Review.
Even if any amended assessment issued as a result of this practice were invalid, that would not indicate that the process of consideration leading to the assessment was not part of the deliberative processes of the agency. Such a decision has effect in practice unless set aside. See
Re Brian Lawlor Automotive Pty. Limited and Collector of Customs (N.S.W.) (1978) 1 A.L.D. 167. We therefore do not regard the relevant deliberative processes of the respondent as having stopped either when the request for reference to the Taxation Board of Review was
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lodged or when the matter was referred to a Taxation Board of Review.That is not to say that everything done thereafter was done as part of the deliberative processes of the agency. In this case, we do not have to concern ourselves with steps taken in preparation for the hearing before a Taxation Board of Review. We do not have to consider whether such steps would be steps involving opinion, advice or recommendation in the course of or for the purposes of the deliberative processes of the agency. No such documents are in dispute before us.
For the purposes of the present review, it is not necessary to determine whether the term ``deliberative processes'' has as wide an operation as was attributed to it in Re Waterford (No. 2), cited above. In most cases, and in the present case, there are other aspects of sec. 36(1) which must also be looked at, namely, whether the information ``would disclose matter in the nature of, or relating to, opinion, advice or recommendation...'' and whether disclosure of the information ``would be contrary to the public interest''. These other elements of sec. 36 will often be the more significant elements in the consideration of a particular document. If it is found that a document should not be disclosed because the grant of access would disclose opinion, advice or recommendation and that such disclosure is not in the public interest, it will almost inevitably be found that such opinion, advice or recommendation was prepared or recorded or obtained in the course of, or for the purposes of, deliberative processes involved in the functions of the agency.
Having regard, therefore, to the views which we have formed on public interest, we think it is unnecessary for us to further deal with the concept of ``deliberative processes''.
For the same reason, it is unnecessary to discuss whether every document in issue involves ``opinion, advice or recommendation'' and to what extent each document does so.
The Public Interest - sec. 36(1)(b)
It is clear that the public interest is not to be limited by the prescription of categories or classes of documents the disclosure of which to the public would be contrary to the public interest. The public interest is not to be circumscribed. All documents must be examined to ascertain whether, having regard to the circumstances, their disclosure would be contrary to the public interest.
However, many of the American authorities throw light upon the elements of public interest to be considered for the purpose of sec. 36. In
Jordan v. Department of Justice 591 F. 2d 753 (1978) at pp. 772-773, Wilkey J., delivering the opinion of the Court of Appeals, said:
``One of the traditional evidentiary privileges available to the Government in the civil discovery context is the common-sense, common-law deliberative process privilege. See Louisell Federal Evidence, s 228-231 (1978). See generally
Nixon v. Sirica, 159 U.S. App. D.C. 58, 121-123, 487 F. 2d 700 at pp. 763-765 (1973) (Wilkey J., dissenting). This privilege protects the `consultative functions' of government maintaining the confidentiality of `advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated'.
Carl Zeiss Stiftung v. V.E.B. Carl Zeiss Jena, 40 F.R.D. 318, 324 (D.D.C. 1966), aff'd per curiam 128 U.S. PP. D.C. 10, 384 R. 2D 979, cert. denied, 389 U.S. 952, 88 S.Ct. 334, 19 L.Ed. 2d 361 (1967);
Grumman Aircraft Eng. Corp. v. Renegotiation Board, 157 U.S. App. D.C. 121, 482 F. 2d 710 (1973), rev'd on other grounds, 421 U.S. 168, 95 S. Ct. 1491, 44 L.Ed. 2d 57 (1975). The privilege attaches to inter- and intra-agency communications that are part of the deliberative process preceding the adoption and promulgation of an agency policy. There are essentially three policy bases for this privilege. First, it protects creative debate and candid consideration of alternatives within an agency, and, thereby, improves the quality of agency policy decisions. See
NLRB v. Sears. Roebuck & Co., 421 U.S. at p. 151, 95 S. Ct. 1504;
Montrose Chemical Corp. v. Train, 160 U.S. App. D.C. 270, 273, 491 F. 2d 63, 66 (1974). Second, it protects the public from the confusion that would result from premature exposure to discussions occurring before the policies affecting it had actually been settled upon. See Grumman Aircraft Eng. Corp. v. Renegotiation Board, note 77 supra, 157 U.S. App. D.C. at p. 129, 482 F. 2d at 718;
Sterling Drug Inc. v. FTC, 146 U.S. App. D.C. 237, 245-246,
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450 F. 2d 698, 706-708 (1971). And third, it protects the integrity of the decision-making process itself by confirming that `officials should be judged by what they decide[,] not for matters they considered before making up their minds'. Grumman Aircraft Eng. Corp. v. Renegotiation Board, note 77 supra, 157 U.S. App. D.C. at 129, 482 F. 2d at 718. See
Boeing Airplane Co. v. Coggeshall, 108 U.S. App. 106, 112, 280 F. 2d 654, 660 (1960); Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, note 77 supra, 40 F.R.D. at 325-326.''
Likewise, in
Coastal States Gas Corporation v. Department of Energy 617 F. 2d 854, (1980) Judge Wald, delivering the opinion of the Court, said, at p. 866:
``... A privilege unique to the government is one which is variously described as predecisional or deliberative process privilege. The privilege has a number of purposes: it serves to assure that subordinates within an agency will feel free to provide the decision-maker with their uninhibited opinions and recommendation without fear of later being subject to public ridicule or criticism; to protect against premature disclosure of proposed policies before they have been finally formulated or adopted; and to protect against confusing the issues and misleading the public by dissemination of documents suggesting reasons and rationales for a course of action which were not in fact the ultimate reasons for the agency's action. See Jordan, 192 U.S. App. D.C. at 163-165, 591 F. 2d at pp. 772-774.
...
... To test whether disclosure of a document is likely to adversely affect the purposes of the privilege, courts ask themselves whether the document is so candid or personal in nature that public disclosure is likely in the future to stifle honest and frank communication within the agency; `Human experience teaches that those who expect public dissemination of their remarks may well temper candor with a concern for appearances and for their own interests to the detriment of the decision-making process'.
United States v. Nixon 418 U.S. 683, 705, 94 S. Ct. 3090, 3106, 41 L.Ed. 2d 1039 (1974).''
These cases, which concerned Exemption (b)(5), an exemption which creates a privilege similar to that of Crown privilege enunciated by the Courts in the United Kingdom and in Australia, point to the need for protecting pre-decisional and pre-policy-making discussion with a view to promoting creative debate and candid consideration, with a view to protecting the public from the confusion that may result from premature exposure of pre-decisional discussion and with a view to protecting the integrity of the decision-making process itself by clearly separating the final decision-making or policy-making step and the reasons therefor from the opinions and advice of the officials who contributed to the consideration.
Moreover, recent authorities have considered some limited classes of documents to be such that their public disclosure would not be in the public interest. Such documents were discussed in
Conway v. Rimmer & Anor (1968) A.C. 910, especially per Lord Reid at p. 952 and Lord Upjohn at pp. 993-994. See also
Sankey v. Whitlam (1978) 142 C.L.R. 1. Such decisions deal with a point somewhat different from that arising under sec. 36(1)(b). The Crown privilege cases concern situations where there are conflicting elements of the public interest, on the one hand, the need for candour and frankness amongst officers of the Public Service and the need to protect that interest and, on the other hand, the need to assist the proper administration of justice by ensuring that Courts are not deprived of information which is necessary for the determination of the disputes before them. That latter element is seldom of relevance in a request for access under the FOI Act 1982.
An application for access to Australian Taxation Office records relating to the affairs of a particular person must necessarily be made by that person. Section 16 of the Income Tax Assessment Act precludes the disclosure to an individual of information relating to the affairs of ``any other person''. But it does not preclude the disclosure of the information to the individuals to whose affairs the information relates. Therefore, to that extent, the public interest must be considered in relation to the disclosure to a taxpayer of the affairs of that taxpayer. Disclosure to the world at large is not involved. But we think, nevertheless, that the ``public interest'' looks to broader concepts than the circumstances of the particular case. Section
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37(1)(a) rather than sec. 36(1) looks to the circumstances of ``a particular instance''.In our opinion, the ``public interest'' looks to matters such as the overall need for confidentiality within the Australian Taxation Office and the nature of the documents to which access is sought, whether they are documents relating to a purely routine assessment or whether they are documents concerned with the investigation of taxation evasion or like matter in respect of which there is special reason for confidentiality. Broadly speaking, sec. 36 can be seen as an attempt by the legislature to protect the integrity and viability of the decision-making process. If the release of documents would impair this process to a significant or substantial degree and there is no countervailing benefit to the public which outweighs that impairment then it would be contrary to the public interest to grant access.
Moreover, public interest must be considered in the light of sec. 3(2) of the Act which provides that ``... the provisions of this Act shall be interpreted so as to further the object set out in subsec. (1)...''. Section 3(1) provides:
``The object of this Act is to extend as far as possible the right of the Australian community to access to information in the possession of the Government of the Commonwealth by -
- (a)...
- (b) creating a general right of access to information in documentary form in the possession of Ministers, departments and public authorities, limited only by exceptions and exemptions necessary for the protection of essential public interests and the private and business affairs of persons in respect of whom information is collected and held by departments and public authorities.''
Note the reference to ``essential public interests''.
Candour and Frankness
It was submitted, though not strongly, that candour and frankness in making recommendations and in writing opinions with respect to assessments, objections and requests for reference would be affected if disclosure to the public or to the particular taxpayer of such recommendations and opinions took place.
The candour and frankness argument is not new. It achieved pre-eminence at one time but has now been largely limited to high level decision-making and to policy-making. See Conway v. Rimmer & Anor., cited above,
Burmah Oil v. Governor and Company of the Bank of England (1980) A.C. 1090 at pp. 1132-1133, per Lord Keith;
Campbell v. Tameside Metropolitan Borough Council (1982) 1 Q.B. 1065 at p. 1077, per Ackner L.J. at p. 1079, per O'Connor L.J.;
Science Research Council v. Nasse (1980) A.C. 1028 at p. 1070 per Lord Salmon, p. 1081 per Lord Fraser; Sankey v. Whitlam, cited above, pp. 62-63 per Stephen J., p. 97 per Mason J.; cp. Burmah Oil v. Governor and Company of the Bank of England, cited above, p. 1112 per Lord Wilberforce, p. 1145 per Lord Scarman; Sankey v. Whitlam, cited above, p. 38 per Gibbs C.J. It was submitted that, if officers of the Department of Taxation knew of the possibility that their written comments would be disclosed to the particular taxpayer, they would be more reluctant to commit their views to paper. Mr. Tomkins gave evidence that officers of the Department were actively encouraged to put their personal beliefs in no uncertain terms. Often, Mr. Tomkins said, they would ``argue strongly'' in favour of taxpayers. It was suggested that such a process might be hampered if an officer knew that at some later point in time in the appeal stage he or she would have to argue in favour of the Commissioner and contrary to the officer's earlier observations. It was suggested that this would put the officer in an untenable position.
We cannot accept this view. It is one of the duties of an officer of the Department to argue in favour of proper recovery of taxation. It is also a duty to weigh up arguments in favour of and against the taxpayer. The fact that an officer may express views which favour a taxpayer cannot be held against him or her in any way. The expression of such views cannot be used against him or her at the review stage. If officers are made aware of this fact then they should not temper the nature of their comments nor be reluctant to commit them to paper.
No cogent evidence has been given to this Tribunal either in this review or, so far as we are aware, in any other, that the enactment of the FOI Act 1982 has led to an inappropriate lack of candour between officers of a department or to a deterioration in the quality of the work
ATC 4526
performed by officers. Indeed, the presently perceived view is that the new administrative law, of which the FOI Act 1982 forms a part, has led to an improvement in primary decision-making.
Subversion of Discovery Rules
One of the major submissions put by counsel for the respondent was that, if access were granted to the documents in dispute, discovery rules would be rendered redundant if future litigation were to take place. If an appeal were taken to the Supreme Court, the taxpayer would have no need to request discovery. Further, it was submitted that discovery only extends to particulars and not to the names of witnesses nor the nature of the Department's evidence.
We think that this submission is more appropriately put under sec. 37(1)(a). Nevertheless, as it was put with respect to sec. 36(1), we shall consider it at this stage.
In this case, there is a reference to an administrative body, the Taxation Board of Review. The Taxation Boards of Review have no power to order discovery of documents. Therefore, no discovery rules of the Board can be subverted. The fact that an appeal may lie from the decision of the Taxation Board of Review to a Supreme Court is of little significance. At the present time, there is no such appeal. If there were proceedings before a State Supreme Court, it would be proper to give consideration as to whether, in the public interest, the grant of access to documents should be left to the decision of the Court, it having adequate powers to order disclosure if, having regard to the justice of the case, it considered that disclosure to be appropriate. But that is not the position with which we are faced. There is no proceeding before a Court of law and no Court has power to grant access to the documents which the applicant seeks.
Regulation 35(1) of the Income Tax Regulations provides that the Commissioner shall supply certain particulars to the Taxation Board of Review, including (c) ``the Commissioner's reasons for disallowing the taxpayer's claim''. In
Sutton v. F.C. of T. (1958) 100 C.L.R. 518, the High Court of Australia held that, in complying with reg. 35, the Commissioner need not reveal the steps in the reasoning leading to his ultimate conclusion. In
Cain, F.C. of T.; ex parte Evatt 75 ATC 4254, the High Court of Australia followed the Sutton decision. In Sutton, at p. 524, the High Court of Australia said:
``... It is to be observed that reg. 35(1)(c) is directed not to ensuring that the taxpayer is informed of the Commissioner's reasons but to supplying the Board with them.''
But the FOI Act 1982 has ushered in a new era. An interpretation of reg. 35 cannot determine the public interest test in sec. 36.
A more relevant question is whether it is injurious to the public interest to reveal documents to a taxpayer which include details of the evidence which the Commissioner intends to use and the witnesses he will call when the matter is dealt with by the Taxation Board of Review. Certainly, an order for particulars by a Supreme Court does not entitle the party to such information - see
Bailey v. F.C. of T. 77 ATC 4096 at p. 4099 per Mason J. Also see
Mack v. F.C. of T. 83 ATC 4043 at pp. 4057-4058. However, no such information is contained in the documents in dispute in this review. The respondent has already revealed to the applicant the valuer's report setting out evidence upon which the respondent may rely before the Taxation Board of Review. The information now in dispute is said to be principally opinion, advice or recommendation.
Efficient Administration
Some of the arguments said to support the view that disclosure would be against the public interest under sec. 36 are also raised under sec. 37. We first consider these arguments in the context of sec. 36(1)(b). Counsel for the respondent suggested in a written submission that:
``The release of the working documents of the respondent would destabilize the whole economy of negotiation and settlement which is central to the administration of the revenue legislation.''
The argument put for the respondent ran as follows:
- (1) The taxpayer knows all the facts with respect to his or her assessment. The Commissioner on the other hand will often know far less.
- (2) If the taxpayer were given access to the Commissioner's working files, the taxpayer would know precisely what the Commissioner knew and also what the Commissioner did not have knowledge of.
ATC 4527
- (3) This would put the taxpayer in a far stronger position vis-a-vis the Commissioner than the Commissioner vis-a-vis the taxpayer.
- (4) The onus of proof is on the taxpayer by sec. 190(b) of the Income Tax Assessment Act and it cannot have been intended that the taxpayer be placed in a position where he or she could easily discharge this onus.
- (5) The process of negotiation and settlement between the Commissioner and the taxpayer would be severely damaged as settlement must necessarily take place in an environment where each party is not fully conversant with the other's case. Without access, the taxpayer will have to assume that the Commissioner knows all the relevant facts.
- (6) Disclosure of the file could also mislead the taxpayer and thus damage the negotiation and settlement processes.
- (7) The disclosure of the file to the taxpayer might -
- ``... reveal that although the respondent has no evidence, it has deep scepticism of a taxpayer's explanation of characterisation of his activities. Deprived of the mutual half light which is the necessary pre-condition of negotiation and settlement, a taxpayer, unable to deliver the respondent from his scepticism, will watch his case going remorsely to the Board''
(our emphasis).
A taxpayer will not necessarily know all the relevant facts. As Mason J. observed in Bailey v. F.C. of T., cited above, at p. 4100 (see above), relevant facts in an appeal, though not necessarily in a review,
``... include the view of the facts on which the Commissioner has based his assessment, the manner in which he has arrived at his assessment. These facts are not within the knowledge of the taxpayer; they are within the knowledge of the Commissioner.''
To give access to the applicant to the documents in dispute would be to give to the taxpayer knowledge of such facts. It is pertinent to note that Mason J. continued:
``Indeed, there is very much to be said for the view that fairness to the taxpayer demands that the Commissioner should be compelled to give particulars of his assessment when it issues so that the taxpayer is adequately informed as to the manner in which the assessment has been arrived at and may then determine whether he will object to the assessment and subsequently appeal. But that is a matter for the legislature.''
It is worth noting, moreover, that Courts have not taken the view that there is any special element about taxation affairs which precludes the making of an order for particulars or discovery. See
Krew v. F.C. of T. 71 ATC 4091,
L'Estrange v. F.C. of T. 73 ATC 4061, and Bailey v. F.C. of T., cited above. In Bailey's case, at p. 4105, Aickin J., with whom Barwick C.J., Gibbs, Mason and Jacobs JJ. agreed, said:
``He [Jeffrey J.] did, however, conclude his review of the authorities by stating that in the exercise of its discretion the Court will give paramountcy to the principle that the appellant should have the fullest particulars necessary to him to enable him to appraise the case which he has to disprove and should have access to documents necessary for the proof by him of this case. With a general proposition expressed in those general terms I would respectfully agree.''
We do not accept the contention put forward that it is in the interests of the public that negotiations between taxpayers and the Australian Taxation Office should proceed on inadequate knowledge. We abhor the contention that ``mutual half-light'' should be ``the necessary pre-condition of negotiation and settlement''. Objections to income tax assessments are not lodged only by tax evaders and tax avoiders. There is no suggestion of any such circumstance in the present case. We think it highly undesirable that, in a case such as the present, both the Australian Taxation Office and the taxpayer should not work together to ascertain the relevant facts and to arrive at a proper conclusion having regard to the whole of the relevant facts. As we have already said, we think that there are many relevant facts which are still in the sole possession of the applicant and Mr. X and that it would be useful if those facts were to be disclosed to the Australian Taxation Office. The process of ascertaining all relevant facts is likely to be enhanced if the taxpayer knows what are the facts which the Australian Taxation Office has taken into
ATC 4528
account. In so far as those facts are not the full facts of the matter, the taxpayer may supplement them with further information.In general, we do not think it desirable that the taxation system should proceed upon the basis of negotiation in ``mutual half-light''. In some countries of the world, such an approach to taxation may be accepted. But, in Australia, we think an attempt should be made to arrive at the proper tax which is payable. This can be achieved only if all relevant facts are ascertained. In our opinion, the granting of access to documents which show the factual basis upon which officers of the Australian Taxation Office have proceeded is likely to advance this process.
Premature Disclosure
Mr. Santamaria did not contend that, in the present case, the disclosure of any of the documents sought would prematurely disclose information held by the Australian Taxation Office save in the sense that, there being a review now before a Taxation Board of Review, the respondent did not wish to disclose to the applicant, pending the resolution of that review, information bearing upon the matters in dispute in the review. But this is a view which, in this context, would have validity only if all steps that the respondent may take in relation to the appearance before the Taxation Board of Review can be regarded as part of the ``deliberative processes'' of the agency. This view is difficult to accept. In a case which is determined by a Taxation Board of Review, the Board is the decision-maker, not the respondent. Therefore, the decision of the Taxation Board of Review cannot be looked upon as a relevant decision, as part of the ``deliberative processes'' of the respondent and the documents with which we are concerned cannot be regarded as documents prepared as recording advice, opinion or recommendation in the course of, or for the purposes of, a deliberative process which includes the Taxation Board of Review decision. This argument is better put under sec. 37(1)(a).
(a) Section 36 - Summary
We are not able to ascertain in this case any ground for concluding that the disclosure of these documents to the applicant would be contrary to the public interest. In communications between Ministers and between servants of the Crown and Ministers and even communications at a very high level within the Public Service and like circumstances it may well be necessary to give a special protection to communications to ensure that sensitive material is not misunderstood or misapplied by an ill-informed public. But that argument has little relevance to the discussion of a routine matter within an agency. The applicant's affairs are such a matter. There is no element of special sensitivity. As Lord Reid said in Conway v. Rimmer & Anor., cited above, at p. 941, with respect to routine communications with or within a public department:
``... but, so far as I know, no one has ever suggested that public safety has been endangered by the candour or completeness of such reports having been inhibited by the fact that they may have to be produced if the interests of the due administration of justice should ever require production at any time.''
It has not been shown that public administration has suffered by the production of such documents on request.
Next, it was put that the disclosure of information to taxpayers will prejudice the careful structure of negotiation which the Australian Taxation Office has developed in accordance with the Act. We accept that the Income Tax Assessment Act and Regulations make little provision for informing taxpayers of the reasons for assessments and the evidence which was taken into account. Certainly, the Income Tax Assessment Act contains no provisions such as sec. 28 and 37 of the Administrative Appeals Tribunal Act 1975 (Cth.). We accept, moreover, that the First Schedule to the Administrative Decisions (Judicial Review) Act 1977 (Cth.) excludes many taxation decisions from the operation of that Act. We also accept that the Australian Taxation Office has very often had great difficulty in ascertaining all relevant facts and indeed that it relies heavily upon information communicated to it by taxpayers. But notwithstanding these matters, we are unable to accept that, in an ordinary routine case, every endeavour should not be made to obtain all the facts of the matter. We think that such a process is likely to be encouraged if the Australian Taxation Office is prepared readily to disclose to taxpayers the information upon which it acts.
We do not think it contrary to the public interest if the disclosure of such information, from time to time, should demonstrate that an
ATC 4529
assessment or decision on an objection was wrong in law and should be set aside. Nor do we see that it is against the public interest that taxpayers, who have, or may have, a case before a Taxation Board of Review should have a full understanding of the basis on which an assessment was made.It was put for the respondent that the disclosure of the information would prejudice the respondent's case before the Taxation Board of Review. We think that, in principle, the question under sec. 36 must be whether or not the disclosure of the information is likely to enhance or inhibit the quality of the decision of the Taxation Board of Review. But we need not deal with this aspect of the matter further. In the present case, there is no aspect of the documents which are in issue the disclosure of which would be likely to prejudice the respondent's case before the Taxation Board of Review.
Nor do we think that disclosure of the Ombudsman's documents in the present case would prejudice the Ombudsman's investigation or the respondent's response thereto.
We would add that we are not satisfied that the disclosure of the documents in issue would lead to an undesirable confusion between the decisions that were taken and the opinions and advice that led up to them. Indeed, no argument to that effect was put.
We have read through all of the documents in dispute. We are not satisfied that there is any one of them the disclosure of which would be contrary to the public interest. We are therefore of the view that sec. 36 does not exempt any of those documents from disclosure.
It is not necessary for us to deal individually with the documents. There are one or two documents which clearly do not contain opinion, advice or recommendation and there are one or two which we would think did not form part of the ``deliberative processes'' of the agency. But it is not necessary for us to discuss these. Nor is it necessary for us to discuss the limitation provided by sec. 36(5) with respect to factual material.
(b) Section 37(1)(a)
Section 37(1)(a) of the FOI Act 1982 provides that:
``37(1) A document is an exempt document if its disclosure under this Act would, or could reasonably be expected to -
- (a) prejudice the conduct of an investigation of a breach, or possible breach, of the law, or a failure, or possible failure, to comply with a law relating to taxation or prejudice the enforcement or proper administration of the law in a particular instance;
- ....''
Section 37(1)(a) contains a number of grounds of exemption. Mr. Santamaria sought to rely on the final part of the paragraph, first, that the disclosure would ``... prejudice the conduct of an investigation of a... failure, or possible failure, to comply with a law relating to taxation... in a particular instance'' and, secondly, that disclosure would, ``... prejudice the enforcement or proper administration of the law in a particular instance''. The words ``in a particular instance'' in our opinion, qualify each phrase in sec. 37(1)(a). Regard cannot be had therefore to the possible effect of disclosure in other cases.
The first part of paragraph (a) is inapplicable. There has never been any suggestion of failure to comply with a law relating to taxation. The applicant has simply objected to the disallowance of deductions, arguing that she was carrying on a primary production business. The Commissioner simply asserts that no such business was being carried on. There is no suggestion that any offence under the Income Tax Assessment Act has been committed - that there has been a false return (sec. 227), that income has been knowingly and wilfully understated (sec. 230) or that there has been a fraudulent avoidance of tax (sec. 231). In his summing up, Mr. Santamaria accepted that this was ``a routine'' case. Such a dispute over a deduction does not fall within the words ``failure, or possible failure, to comply with a law relating to taxation''.
Mr. Santamaria submitted that disclosure would ``prejudice the enforcement or proper administration of the law'' in this case. The arguments were directed to showing prejudice to the ``administration'' of the law rather than to its ``enforcement''.
Many of the arguments submitted under sec. 36(1)(b) are not relevant here. The argument that officers would be less frank in their observations is of no relevance as that process has been completed in this particular instance. One argument is that release would make
ATC 4530
settlement in this case more difficult to achieve. But we are not satisfied that this would be so or, indeed, that there should be settlement in half knowledge.If the disclosure of the documents would hinder the proper conduct of the proceedings before the Taxation Board of Review, then such disclosure would ``prejudice the... proper administration of the law''. Section 37(1)(a) is the appropriate provision to deal with such a case. But such prejudice must be shown. In the present case, disclosure of the documents would not, we think, have a prejudicial effect upon the proceedings before the Taxation Board of Review. The granting of access would not hinder the respondent in the presentation of his case or unfairly assist the applicant in the presentation of hers. The documents in issue do not disclose names of witnesses or statements of witnesses or the like. Nor would the grant of access subvert the application of discovery rules in the Taxation Board of Review proceedings. There are no such rules.
We have dealt with these matters in more detail when considering sec. 36(1). We need not restate these matters again.
In our opinion, the prejudicial effect postulated by sec. 37(1)(a) has not been shown and the documents are not exempt under this head. We should also mention under this head that it has not been shown, nor indeed claimed, by the Ombudsman, that disclosure of the Ombudsman's documents would prejudice the Ombudsman's investigation.
(c) Section 38
The respondent submitted that sec. 38 of the FOI Act 1982 picked up sec. 16(2) of the Income Tax Assessment Act. Section 16(2) is as follows:
``16(2) Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any such information so acquired by him.''
The reference to ``such information so acquired by him'' is a reference back to the definition of ``officer'' in sec. 16(1) which refers to a person who ``... may acquire or has acquired information respecting the affairs of any other person...''. Thus, the two provisions are to be read together so that sec. 16(2) prohibits the communication to a person of information respecting the affairs of any other person. We do not read the subsection as precluding the disclosure to a person of information relating to that person's affairs. Section 16(2) does not preclude the disclosure to the applicant of information which relates to her own taxation affairs.
However, there are some passages in the documents which refer to Mr. X and in part to his own personal affairs. We think that sec. 38 of the FOI Act 1982 exempts such disclosure by giving effect to the provisions of sec. 16(2). We think that sec. 16(2) is a provision of the type referred to in sec. 38 because it specifies the information not to be disclosed, that is to say, the information relating to the affairs of any other person. Such a provision specifies ``the nature or quality of information which is not to be disclosed'' for the purposes of sec. 38.
We are therefore of the view that certain parts of the documents which are in issue should be deleted. It is not necessary to delete every reference to Mr. X's name, or to his connection with the partnership, for all that is known to the applicant, and the deletion of the name would achieve nothing. Mr. X has given consent to the release of the documents sought by the applicant relating to her own affairs and the affairs of the partnership. In so far as those matters necessarily include a reference to Mr. X he has waived any objection to disclosure. We think that such disclosure is neither prohibited by sec. 16(2) nor exempted by sec. 38 of the FOI Act 1982. But there are certain passages which relate only to Mr. X's own affairs and these should be deleted.
Even if we were wrong in our interpretation of sec. 16(2) of the Income Tax Assessment Act and of sec. 38 of the FOI Act 1982, we would exclude those passages which relate exclusively to Mr. X's affairs because of the provisions of sec. 41. Disclosure would unreasonably disclose ``information relating to the personal affairs of another person''. Mr. X has not consented to the release of information dealing solely with his own affairs.
(d) Section 40
(i) Proper and Efficient Conduct of the Operations of an Agency
Counsel for the respondent did not specifically rely upon the provisions of sec.
ATC 4531
40(1)(d), exempting the disclosure of information which would have a substantial adverse effect on the proper and efficient conduct of the operations of the agency. However, many of his submissions added together to this contention. In particular, he submitted that the process of negotiation between the taxpayer and the Australian Taxation Office was essential for the maintenance of the objection and appeal system as presently established, that the disclosure of information to taxpayers would lead to a breaking down of this system, that many more cases would then be forwarded to Taxation Boards of Review rather than settled, and that the disclosure of documents would lead to lack of candour by officers and would inhibit the making of appropriate recommendations to senior officers of the Australian Taxation Office.We have already dealt with these matters and we need not again deal with them under this head. For the reasons we have already stated, we think that it has not been shown that the disclosure of the documents would have a substantial adverse effect on the proper and efficient conduct of the operations of the Australian Taxation Office. Nor has it been claimed by the Ombudsman or demonstrated that disclosure of the Ombudsman's documents would have such an effect upon the operations of the Ombudsman.
(ii) Management or Assessment of Personnel
However, it was contended that the disclosure of the names of the officers to whom, or from whom, documents passed, or who were mentioned in the documents, would have ``a substantial adverse effect on the management... of personnel by... [the] agency''. Section 40(1)(c) was relied upon. In order to avoid the hearing of evidence on this point, Mr. B.J. Hess, who with Mr. S. Stern appeared for the applicant, conceded that the names of such officers may be excluded from the access granted. We accept that concession.
(e) Section 42 - Legal Professional Privilege
Section 42(1) provides:
``42(1) A document is an exempt document if it is of such a nature that it would be privileged from production in legal proceedings on the ground of legal professional privilege.''
Section 42(1) was hesitatingly relied upon by the respondent. However, it was conceded in the written submissions presented to the Tribunal that, ``There is no evidence in this case before the Tribunal that any of the documents were produced by lawyers for the advice of the respondent''. For legal professional privilege to apply, the relationship of solicitor and client must exist. The Tribunal need only refer to a passage in the judgment of Deane J. in
Baker v. Campbell 83 ATC 4606 at p. 4642; (1983) 49 A.L.R. 385 at p. 433 -
``... the principle underlying legal professional privilege is that a person should be entitled to seek and obtain legal advice without the apprehension of being prejudiced by subsequent disclosure of confidential communications and that the privilege is not confined to such communications as are made in the course of or in anticipation of litigation but extends generally to confidential communications of a professional nature between a person and his lawyer made for the purpose of obtaining or giving legal advice,...''
(emphasis added).
The privilege was considered at some length in Re Waterford (No. 2), cited above. As the Tribunal said:
``14. The same privilege attaches to communications with a solicitor in the whole-time service of a party, such as a solicitor employed by a Government Department, as to communications with a solicitor practising independently, provided that the communication relates to legal as distinct from administrative matters:
Alfred Crompton Amusement Machines Ltd. v. Commissioner of Customs and Excise (No. 2) (1974) A.C. 405.''
In this present review, there is no evidence to support a conclusion that any of the documents emanated from lawyers or a legal department. The required relationship has not been established.
(f) Section 45 - Breach of Confidence
Section 45 provides:
``45(1) A document is an exempt document if its disclosure under this Act would constitute a breach of confidence.
(2) Sub-section (1) does not apply to any document to the disclosure of which paragraph 36(1)(a) applies or would apply,
ATC 4532
but for the operation of sub-section 36(2), (5) or (6), being a document prepared by a Minister, a member of the staff of a Minister, or an officer or employee of an agency, in the course of his duties, or by a prescribed authority in the performance of its functions, for purposes relating to the affairs of an agency or a Department of State.''
However, the facts before the Tribunal do not establish any breach of confidence. No evidence was given on behalf of the respondent that any special confidence attached to the documents which were in issue. The only element of confidence arises from the Ombudsman's investigation and the aura of confidentiality in which, before
Kavvadias v. Commonwealth Ombudsman (1984) ADMN ¶96-011, an investigation by the Ombudsman was carried out. But, in the present case, the Ombudsman was given notice of the proceedings by the respondent and advised the respondent that he did not claim protection for the documents. There is nothing in the Ombudsman Act 1976 (Cth.) which in itself imposes a duty of confidence with respect to these particular documents. Accordingly, sec. 45 does not apply.
CONCLUSION
We are, therefore, of the opinion that no general exemption for the documents has been established and we are of the view that access should be granted. However, Mr. Hess conceded that the names of the officers from whom, and to whom, the subject memoranda were sent, and like references to officers, should be deleted from the documents. These names may, therefore, be deleted when access is given. Moreover, passages in the documents relating solely to the affairs of Mr. X should be deleted. This does not mean that all references to Mr. X should be deleted. He has consented to the release to the applicant of the documents sought which relate to the applicant's affairs and the affairs of the partnership. But any references to Mr. X's own affairs should be deleted.
We shall reserve liberty to the parties to apply for any further or other order as may seem meet. We intend to include within this liberty to apply a right to apply with respect to the identification of any of the documents which are in dispute. Although we have set out in the schedule to these reasons documents which are said to be in dispute, there was some confusion about them at the hearing and at least one of the documents is before us in more than one form. If any problem arises with respect to a particular document, it may be made the subject of an application.
Schedule of Documents
1. Handwritten report by Advising Officer of 23/3/82
2. Handwritten report by Advising Officer of 8/6/82
3. Handwritten assessing direction by Advising Officer of 8/6/82
4. Handwritten report by Advising Officer of 9/7/82
5. Typewritten report by Advising Officer of 30/7/82
6. Typewritten letter (which did not issue) from Deputy Commissioner of Taxation
7. Handwritten report of telephone call with Ombudsman's Office of 30/11/82
8. File note re preparation of documents of 2/12/82
9. Handwritten file note re Ombudsman's letter of 7/12/82
10. Typewritten memorandum from State to Federal Office of 7/12/82
11. Typewritten memorandum from State to Federal Office of 19/1/83
12. Handwritten report by Assessor for inspection by a valuer and recommendation by a more senior officer, 2 and 4/6/81
13. Typewritten cover note on valuer's report of 26/8/81 and handwritten recommendation of 27/8/81
14. Handwritten objection report by Assessor of 15/9/81
15. Handwritten file working papers (not dated)
16. Handwritten report by Supervisor of 15/6/82 and handwritten recommendation by a more senior officer of 16/6/82
17. Typewritten letter from First Assistant Commissioner to the Commonwealth Ombudsman of 9/9/83
18. Draft typewritten letter with written additions from First Assistant Commissioner to the Commonwealth Ombudsman (undated)
19. Typewritten letter from Commonwealth Ombudsman to Commissioner for Taxation of 2/3/83
20. Typewritten note with handwritten additions of 26/8/83
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21. Handwritten report of telephone call with an officer of the Ombudsman of 19/7/83 and handwritten comment of 26/7/83
22. Document 10 with date 19/1/83 with some changes in the text and with handwritten notes thereon
23. Document 11 with handwritten additions
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