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Whether the Revenue was justified in refusing, under various provisions of the FOI Act, the applicant's request for access to certain records concerning his tax affairs from 1 January 2003 to 1 February 2013 inclusive

Conducted in accordance with section 34(2) of the FOI Act, by Elizabeth Dolan, Senior Investigator, who is authorised by the Information Commissioner to conduct this review

Background

On 1 February 2013, the applicant (via his agents) made an FOI request for "all records in respect of the period from 1st January 2003 to 1st February 2013 inclusive". Two decisions issued, one from the Revenue Solicitors Office (the RSO) and the other from the Revenue's Border Midlands West Region (the BMW Region). The decisions of the RSO dated 28 March 2013 and of the BMW Region dated 2 April 2013 decided to release certain records to the applicant and to withhold others relying on sections 12(2(b)(ii), 21(1)(a), 22(1)(a), 23(1)(a)(viii), 26(1)(b), 27(1)(b) and 28(1) for its refusal. The applicant sought an internal review of both decisions by letter dated 20 April 2013 and the Revenue's internal review decision of 8 May 2013 affirmed both original decisions. On 10 May 2013, the applicant sought a review by this Office of the Revenue's internal review decision on the request. All references to the "applicant" in this decision may be read as references to the applicant or his agents, as appropriate.

In carrying out my review, I have had regard to correspondence between the Revenue and the applicant as set out above; to the records at issue, copies of which were sent to this Office for the purposes of the review; to details of various contacts between this Office and the Revenue and to details of various contacts between this Office and the applicant. I have had regard also to the provisions of the FOI Act. In the interests of clarity, I should point out that this review was carried out under the provisions of the FOI Acts 1997-2003 notwithstanding the fact that the FOI Act 2014 has now been enacted. The transitional provisions in section 55 of the 2014 Act provide that any action commenced under the 1997 Act but not completed before the commencement of the 2014 Act shall continue to be performed and shall be completed as if the 1997 Act had not been repealed.

Scope of the Review

During a telephone conversation with Ms. Mary Byrne, Investigator, of this Office on 8 July 2014, the applicant stated that he is not interested in the records (14 in total) which relate to the Revenue engaging Counsel and subsequent records dealing with payments to Counsel and stenographers and hire of rooms. These records were refused by the RSO and are listed by the Revenue as Records 52; 65; 78; 87; 112; 118; 123; 125; 127; 149; 151; 163; 165 and 191. The applicant also stated that he is not interested in records relating to transcripts of court proceedings - Records 38; 42; 44-50; 53; 69; 201-202; 205 and 209-212 in the RSO decision and all records in Pad 1-7 in Pad IOT in the BMW Region decision. Record 212 was also partially refused under section 22(1)(a) by the RSO as it contains a cover letter to the Revenue's Counsel enclosing a transcript of proceedings on 12 January 2012 and this entire record is also excluded from this review.

Duplicates of records already released to the applicant are also excluded from this review - Records 20-23; 43; 171; 198; 203; 207 and 220 (released as part of Record 26), Record 35 (released Record 32), Record 189 (released as part of Record 3), Record 200 (released Record 27), Record 216 (copy of Record 54), Record 218 (copy of Record 199) and Record 222 (released as part of Record 219). All of these records are contained in the RSO decision.

In the course of the review, the Revenue decided to release further records to the applicant i.e. five attachments to Record 160 in the RSO decision and Records 2 (apart from the VAT number of a third party) and 16 in Pad B and Record 71 in Pad C1 in the BMW Region decision. These records were sent to the applicant on 20 October 2014. Therefore, the scope of this review is confined to whether or not the Revenue was justified in refusing access to the remainder of the records on the basis that they are exempt from release under the provisions of the FOI Act. These records are as follows:-

RSO decision
Records 2, 6, 8-12, 14, 16, 24, 28, 34, 36, 39-41, 55-56, 58, 64, 66-67, 70, 72-74, 76-77, 79, 81, 85, 88, 90-92, 94-95, 97, 99, 101, 103-106, 108, 111, 113, 119-120, 122, 126, 129-132, 138, 140, 145-147, 150, 152, 155-156, 159-162, 166, 168, 172-182, 184-188, 192-193, 195-196, 204, 206, 213-215, 217, 225, 228, 232-236, 239 and 240-242 (107 records in total).

BMW Region decision
Records 1 and 2 in Pad B; Record 45 in Pad C1; Records 19, 21, 25 and 36 in Pad C2; Record 1 in Pad D2; Records 1-9 and 11-15 in Pad D3; Record 8 in Pad D4; Records 11, 20, 37-43, 46-47, 51-52, 55-62, 67, 103 and 109 in Pad G1; Records 7, 17-18, 21, 25-26, 30-31, 34-35 and 39 in Pad G2 and Record 21 in Pad H (59 records in total).

Analysis and Findings

Preliminary Matters
It is relevant to note, as a preliminary matter, that section 8(4) of the FOI Act, as amended, provides that, subject to the other provisions of the Act, decision makers are not to have regard to any reasons as to why the applicant is seeking the withheld records. Furthermore, section 34(12)(b) of the FOI Act provides that a decision to refuse to grant a request under section 7 shall be presumed not to have been justified unless the head of the relevant public body shows to the Commissioner's satisfaction that its decision was justified. It is relevant to note also that section 43(3) requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record.

Furthermore, the Courts have recognised that the review by this Office is by way of a hearing de novo in the light of the facts and circumstances applying at the date of that review. Finally, it is relevant to note that the Courts have found that the release of a record under the FOI Act is akin to its release to the world at large.

Relevant exemptions
There are, in total, 166 records withheld, either in whole or in part and the Revenue has sought to justify the records being withheld under a variety of exemptions. However, after careful examination of the records involved, it appears to me that they can each be considered, in the first instance, under one of the following five exemptions: section 21(1)(a), section 22(1)(a), section 26(1)(b), section 28(1) and section 28(5B).

Section 21(1)(a)
Section 21(1)(a) provides that a public body may refuse access to a record if it considers that access could reasonably be expected to prejudice the effectiveness of tests, examinations, investigations, inquiries or audits conducted by or on behalf of a public body or the procedures or methods employed for the conduct thereof. Section 21(1) is subject to a public interest test under section 21(2).

In arriving at a decision to claim a section 21 exemption, a decision maker must, firstly, identify the potential harm to the functions covered by the exemption that might arise from disclosure and, having identified that harm, consider the reasonableness of any expectation that the harm will occur. The test of whether the expectation is reasonable is not concerned with the question of probabilities or possibilities. It is concerned simply with whether or not the decision maker's expectation is reasonable. However, to satisfy the Commissioner of the reasonableness of the decision, it is essential that the decision maker explain how and why he or she believes release of these particular records will give rise to the harm envisaged.

I accept that a Revenue audit is an investigation or audit of the kind envisaged by section 21(1)(a). The records withheld under section 21(1)(a) are Record 1 in Pad B; Record 1 in Pad D2; Records 1-9 and 11-15 in Pad D3 and Record 21 in Pad H (17 records). The Revenue's decisions referred to the application of section 21(1)(a) in general terms, saying that release of certain records would disclose information on the procedures and testing of risk rules used by the Revenue and would prejudice the ongoing use of this system by the Revenue.

Record 1 in Pad B and Records 1, 3, 5, 7, and 13 in Pad D3 are records prepared by the audit manager containing guidance/instructions to the auditor on the selection of this particular audit and information used by the audit manager in analysing and examining the data available in the audit inquiry. Record 6 in Pad D3 is information that was obtained in confidence by the Revenue and could divulge procedures and methods employed by the Revenue when undertaking audits. I accept that release of these records could prejudice the effectiveness of the Revenue's procedures, or the methods it employs, for the conduct of its examinations, investigations, inquiries or audits of tax affairs in general. Accordingly, I find that section 21(1)(a) was correctly applied to Records 1 in Pad B; Records 1, 3, 5, 6, 7, and 13 in Pad D3 (seven records).

I am required under section 21(2) to consider whether the public interest would, on balance, be better served by granting rather than refusing the request. While persons who are subject to tax investigation have a clear private interest in the release of records which may hold information on the detailed reasons and processes pertaining to those investigations, the public interest in the release of such records is significantly less clear. I am satisfied that audits play a vital role in the Revenue's efforts to prevent and detect tax evasion. In my view, there is, on balance, no public interest in the release of these records which would outweigh the public interest in ensuring that public bodies, particularly a body such as the Revenue whose function impacts directly on matters involving public money, are able to carry out their statutory functions in the most efficient and effective way possible, without prejudice to the lawful methods employed. This is particularly true in the case of tax audits and investigations, which have the specific and direct purpose of protecting public finances. I find that the withheld records should not be released further to section 21(2) of the FOI Act.

The remainder of the records refused under section 21(1)(a) are Record 1 in Pad D2; Records 2, 4, 8, 9, 11, 12, 14 and 15 in Pad D3 and Record 21 in Pad H (10 records). Although the Revenue exempted these records under section 21(1)(a), I am of the view that section 26(1)(b) is a more appropriate exemption and I deal with these records under section 26(1)(b) below.

Section 22(1)(a)
Section 22(1)(a) of the FOI Act provides for the withholding of a record where it would be exempt from production in proceedings in a court on the ground of legal professional privilege. I accept that legal professional privilege enables the client to maintain the confidentiality of two types of communication:

confidential communications made between the client and his/her professional legal adviser for the purpose of obtaining and/or giving legal advice (advice privilege), and
confidential communications made between the client and a professional legal adviser or the professional legal adviser and a third party or between the client and a third party, the dominant purpose of which is the preparation for contemplated/pending litigation (litigation privilege).

Unlike some other provisions of the Act, section 22(1)(a) does not provide for the setting aside of that exemption where to do so would serve the public interest.

The records withheld under section 22(1)(a) are Records 2, 6, 8-12, 14, 16, 24, 28, 34, 36, 39-41, 55-56, 58, 64, 66-67, 70, 72-74, 76-77, 79, 81, 85, 88, 90-92, 94-95, 97, 99, 101, 103-106, 108, 111, 113, 119-120, 122, 126, 129-132, 138, 140, 145-147, 150, 152, 155-156, 159-162, 166, 168, 172-182, 184-188, 192-193, 195-196, 204, 206, 213-215, 217, 225, 228, 232-236, 239 and 240-242 i.e. all of the records covered by the RSO decision and Records 19, 21, 25 and 36 in Pad C2; Record 8 in Pad D4; Records 11, 20, 37-43, 46-47, 51-52 and 55-62 in Pad G1 and Records 7, 17-18, 21, 25-26, 30-31, 34-35 and 39 in Pad G2 (144 records in total). The Revenue stated that the dominant purpose for the creation of these records was in preparation for prosecution/litigation and that litigation was contemplated or ongoing at the time or prior to the creation of these records.

The records in question consist of confidential communications between the Revenue and its own legal advisers and concern either the preparation for litigation and/or giving or receiving of legal advice. While it could be argued that some of these records involve forwarding of documents and arrangements for meetings etc., this Office has found that legal professional privilege also attaches to records where they are part of a continuum of correspondence arising from an original request for advice or preparation for litigation (Case Number 020281 - Mr. X and the Department of Education and Science on www.oic.ie).

While I understand that the Circuit Court made a ruling in 2013 in respect of the litigation the subject of these records, I also note that the matter has been appealed to the High Court and that these proceedings are still outstanding. As the litigation has not concluded, I consider that these records qualify for legal professional privilege and should be withheld under section 22(1)(a) with the exception of the attachments to Record 160. As noted in the Background section of this decision, the Revenue agreed that legal professional privilege does not apply to these attachments and it has now released them to the applicant. I find therefore that the records at issue as listed above are exempt from release under section 22(1)(a) of the FOI Act.

Section 26(1)(b)
Section 26(1)(b) provides that a public body shall refuse a request if disclosure of the information concerned would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment or otherwise by law. Under section 26(2), however, the confidentiality exemption does not apply to a record prepared by a staff member of a public body or a person who is providing a service for a public body under a contract for services "in the course of the performance of his or her functions unless disclosure of the information concerned would constitute a breach of a duty of confidence that is provided for by an agreement or statute or otherwise by law and is owed to a person other than a public body or head or a director, or member of the staff of, a public body or a person who is providing or provided a service for a public body under a contract for services".

The records withheld under section 26(1)(b) are Records 1 in Pad D2; Records 2, 4, 8-9, 11-12 and 14-15 in Pad D3 and Record 21 in Pad H (10 records), and I am satisfied that these records relate to 'taxpaying entities' separate from the applicant and that release of the records would breach a duty of confidence to such persons provided for by an enactment i.e. the Taxes Consolidation Act 1997 which prohibits release of confidential taxpayer information. In its submission to this Office, the Revenue stated that there is an explicit confidentiality provision set down in section 851A of the Taxes Consolidation Act 1997 which requires the Revenue to protect taxpayer information from release to third parties without the express consent of the taxpayer or as required by law.

Section 26(1)(b) is not subject to the general public interest balancing test under section 26(3). Moreover, having regard to the consideration of the public interest in the judgments of the Supreme Court issued in July 2011 in the case of The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v The Information Commissioner [2011] IESC 26, I do not consider that it is open to this Office to make a finding in this case that public interest grounds exist which would justify a breach of the duty of confidence. Accordingly, I find that these 10 records should be withheld under section 26(1)(b) of the FOI Act.

Sections 28(1) and 28(5B)
Section 28(1) of the FOI Act provides, subject to other provisions of section 28, that a public body shall refuse a request for a record where granting it would involve the disclosure of personal information about an identifiable individual. Section 28(5B), also subject to other provisions of section 28, provides for the mandatory refusal of a record that contains the personal information of the person making the FOI request and also that of another party or parties.

The records in question are Record 2 in Pad B, Record 45 in Pad C1 and Records 67, 103 and 109 in Pad G1 and I am satisfied that the withheld details comprise the personal information of persons other than the applicant, or personal information about the applicant that is inextricably linked to the personal information of other persons ("joint personal information"). The requirements of section 43(3) mean that I cannot elaborate further on the information concerned. I find the withheld details to be exempt under sections 28(1) and 28(5B) of the FOI Act.

There are some circumstances, provided for at section 28(2), in which the exemptions at section 28(1) and section 28(5B) do not apply. Having examined the withheld details, I am satisfied that none of the circumstances identified at section 28(2) arise in this case. That is to say, (a) that the third party information contained in the records does not relate solely to the applicant; (b) that the third parties have not consented to the release of their information; (c) that the information is not of a kind that is available to the general public; (d) that the information at issue does not belong to a class of information which would or might be made available to the general public; and (e) that the disclosure of the information is not necessary to avoid a serious and imminent danger to the life or health of an individual. Accordingly, I find that section 28(2) does not apply to the withheld details.

Section 28(5) provides that a record, which is otherwise exempt under section 28(1) or 28(5B), may be released in certain limited circumstances. The effect of section 28(5)(a) is that a record, which has been found to be exempt under section 28(1) or 28(5B), may be released if it can be demonstrated that "on balance, the public interest that the request should be granted outweighs the public interest that the right to privacy of the individual to whom the information relates should be upheld". In the Rotunda judgment referred to earlier, the Supreme Court outlined the approach that the Commissioner should take when balancing the public interest in granting access to personal information with the public interest in upholding the right to privacy of the individual(s) to whom that information relates. Following the approach of the Supreme Court, a public interest ("a true public interest recognised by means of a well-known and established policy, adopted by the Oireachtas, or by law") must be distinguished from a private interest for the purpose of section 28(5)(a). The language of section 28 and the Long Title to the FOI Act recognise a very strong public interest in protecting the right to privacy (which has a Constitutional dimension, as one of the un-enumerated personal rights under the Constitution). Accordingly, when considering section 28(5)(a), privacy rights will be set aside only where the public interest served by granting the request (and breaching those rights) is sufficiently strong to outweigh the public interest in protecting privacy.

The FOI Act itself recognises the public interest in ensuring the openness and accountability of public bodies in the performance of their functions. This public interest has been served to a certain extent by the material released to the applicant to date. However, having regard to the content of the withheld details, I do not consider that their release would further serve the public interest to such an extent that a breach of the third parties' Constitutional rights to privacy is justified. Thus, I find that the withheld details should not be released further to section 28(5)(a) of the FOI Act.

Finally, it is necessary to consider whether section 28(5)(b) is of relevance. The effect of section 28(5)(b) is that a record, which has been found to be exempt under section 28(1) or section 28(5B), may still be released if it can be demonstrated that the grant of the request would benefit the third party or parties whose personal information is also contained in the records. The applicant has not made any case that the release to him of the personal information of the third parties would be of benefit to those parties, nor am I otherwise aware of any reason to think that this would be the case. I find that no right of access arises further to the provisions of section 28(5)(b) of the FOI Act.

Decision

Having carried out a review under section 34(2) of the FOI Act, I hereby affirm the decision of the Revenue in this case.

Right of Appeal

A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated not later than eight weeks from the date on which notice of the decision was given to the person bringing the appeal.

Elizabeth Dolan
Senior Investigator