Whether the Council was justified, under section 36(1)(b) and (c) of the FOI Act, in refusing access to details of the amount of BID levy collected each month by the Council for each of the months from January 2020 to September 2020

24 August 2021

Background

In December 2017, this Office issued a decision on a request for information relating to the Business Improvement District (BID) Levy (Case No. 170132, available on our website  www.oic.ie). The decision noted that the levy was established by the Local Government (Business Improvement Districts) Act 2006 (the 2006 Act) in order to enable and finance schemes under which projects, services and works are carried out for the benefit of the relevant districts. The 2006 Act states that the local authority shall establish a BID fund for the BID scheme and this shall be paid to a BID company. The establishment of a BID company is also provided for under the 2006 Act and states that the principle objectives of that company are to implement, administer and manage a BID scheme and to ensure each project, service and work under the scheme is carried out. According to the Council its Rates Office bills and collects the levies on behalf of the BID company. However, the BID company itself manages and pursues any debts.

The request in case 170132 was for details of the number of businesses that paid the BID levy, did not pay the levy and were issued with legal proceedings in relation to non-payment of the levy from 2008 to 2016 inclusive. The Council refused the request under section 36 of the FOI Act, which is concerned with the protection of commercially sensitive information. The Senior Investigator annulled the decision of the Council and directed the release of the information sought.

In a request dated 14 October 2020, the same applicant sought details of the amount of BID levy collected each month by the Council for each of the months from January 2020 to September 2020.  In a decision dated 11 November 2020, the Council refused the request under sections 36(1)(b) and (c) of the Act. The applicant sought an internal review of that decision, following which the Council affirmed its refusal of the request. On 23 December 2020, the applicant, though his legal representative, sought a review by this Office of the Council’s decision. For the sake of convenience, all references to communications with the applicant in this decision should be taken to include communications with his legal representatives.

I have now completed my review in accordance with section 22(2) of the FOI Act.  In carrying out my review, I have had regard to the submissions made by the relevant parties who made submissions and to the submissions made by the FOI body in support of its decision. I have decided to conclude this review by way of a formal, binding decision.

Scope of Review

This review is concerned solely with the question of whether the Council was justified, under section 36(1)(b) and (c) of the FOI Act, in refusing access to details of the amount of BID levy collected each month by the Council for each of the months from January 2020 to September 2020.

Preliminary Matter

Section 13(4) of the Act provides that in deciding whether to grant or refuse a request, any reason that the requester gives for the request shall be disregarded. This means that this Office cannot generally have regard to the applicant's motives for seeking access to the information in question.

Analysis and Findings

Section 36(1)(b)

Section 36(1)(b) provides for the mandatory refusal of a request where the record sought contains financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation.

The essence of the test in section 36(1)(b) is not the nature of the information, but the nature of the harm which might be occasioned by its release. The harm test in the first part of subsection (1)(b) is whether disclosure of the information “could reasonably be expected to result in material financial loss or gain”. The Commissioner takes the view that the test to be applied in this regard is not concerned with the question of probabilities or possibilities, but with whether the decision maker’s expectation is reasonable. The harm test in the second part of subsection (1)(b) is whether disclosure of the information “could prejudice the competitive position” of the person in the conduct of his or her profession or business or otherwise in his or her occupation.

In its submissions to his Office, the Council argued that this case is distinguishable from Case 170132. It said the earlier case was concerned with the number of businesses who paid and who did not pay the levy and that the current request relates to the specific amounts collected per month up to September of last year and is financially significant as the levy is the primary source of income for the company.

The BID company is required to keep proper books of account and is required to submit annual audited accounts to the Council no later than 12 weeks after the close of the financial year. The BID company is also required to provide a copy of those accounts on request to any person at a price not exceeding the reasonable cost of reproduction. The Council accepted that that this information is publicly available. It argued, however, that it is however not available at any time of the year or in the format requested, i.e. month by month. It argued that if the information was released it would give a clear indication of the financial position of the company at a particular juncture in 2021. It said the financial performance of the collection in 2020 is significantly impacted by COVID-19 and that the financial indicators are not representative of a normal trading economy. It argued that the figures could be interpreted incorrectly and have a significant financial impact on a private limited company.

The Council further argued that the public availability of the information sought on request would provide a snapshot of the financial position of a company whose funds are not considered to be public funds. It argued that this information has a ‘value’ in terms of providing a clear financial measurement of how in this particular instance a private company is performing at any given time. It argued that exposure in relation to the financial performance of the overall collection could prejudice a commitment to pay if the viability of the company is publicly questioned.

The BID company also made submissions, both to the Council and directly to this Office. In essence, the company argued that this Office has no jurisdiction in relation to information concerning the collection of the levy as the collection is simply facilitated by the Council on the company’s behalf and the information concerns the financial affairs of a private company. Separately, the company argued that the release of its financial information will be used to encourage non-payment of contributions and to sow discontent amongst its members. It said each of these outcomes will have tangible commercial impacts for the organisation. It said it has examples of correspondence from members where non-payment of the BID levy is attributable to the belief that others have not paid.

I should say at the outset that while I fully accept that the information sought is financial information relating to a private company, I do not accept that this Office has no jurisdiction to review a decision taken by the Council to refuse the request. The FOI Act affords a right of access to records held by public bodies. In the case of the Minister for Health and the Information Commissioner [2019] IESC 40, the Supreme Court considered the meaning of held in the context of the act. It found that the public body must not only be in lawful possession of the record in connection with or for the purpose of its business or functions but also must be entitled to access to the information in the record. In this case, the Council is lawfully charged with the collection of the BID, notwithstanding that it does so on behalf of the company. As such, I am satisfied that it is in lawful possession of the information sought in connection with or for the purpose of its business or functions and is also entitled to access to the information in the record. Accordingly, I am satisfied that this Office has the jurisdiction to review the Council’s decision to refuse access to the information sought.

The Council’s argument in support of its reliance on section 36(1)(b) is, in essence, that the information sought relates to a period that was impacted by COVID-19, that it is not representative of a normal trading economy, and that release could prejudice a commitment to pay if the viability of the company is publicly questioned. The company’s primary argument is somewhat similar, namely that the release of its financial information will be used to encourage non-payment of contributions and to sow discontent amongst its members.

I do not accept those arguments. In the first instance, the company is obliged to publish information on the amount of levy collected each year. While this is not the same as publishing information on a monthly basis, it nevertheless allows for conclusions to be drawn as to the level of compliance with payment obligations each year. While the release of the information sought may provide a more granular level of detail, it does not fundamentally change the existing ability to draw conclusions as to the viability of the company based on its levy collection rates.

Moreover, while I accept that 2020 may not be representative of a normal trading economy, it will be of no surprise to anyone who wishes to compare returns to previous years to see that the amount of levy collected has been severely impacted by COVID-19, if that is the case, given the significant impact that the pandemic has had on traders. It seems to me that any reasonable observer would be unlikely to draw broader conclusions as to the viability of the company based on collections rates that have been so uniquely affected. Moreover, this Office does not accept as a general proposition that the possibility of a record being misunderstood provides a sufficient ground for refusing access. Such an argument is based on an unreasonable assumption that public bodies are incapable of explaining their records to the public and unable to present information in a way which will allow any objective observer to draw accurate and balanced considerations.

I also note that while the Council and the company sought to distinguish this case from case 170132, similar arguments arose in the earlier case. It was argued in that case that the release of details of the numbers of business that did and did not pay the levy would be likely to result in a higher number of businesses refusing to pay their levy. This Office did not accept that argument. The Senior Investigator noted that businesses are obliged to pay the levy and its collection, as well as recovery of unpaid levies, is a matter for the Council and the company to pursue as a simple contract debt. While the Council argued that the current economic circumstances coupled with the consequences of COVID-19 restrictions on both the debt recovery process and the court system mean that this is not a viable option at this time, it does not mean that outstanding debt can never be pursued.

In the circumstances, I am not satisfied that the Council has justified its decision to refuse the request under section 36(1)(b) of the Act.

Section 36(1)(c)

Section 36(1)(c) provides for the refusal of a request where the record sought contains information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.

The Council said that, taking cognisance of the challenges presented by COVID-19, are currently engaging on a case by case basis with businesses to assess their ability to pay the BID levy. It said that on the basis of these negotiations, arrangements have been agreed and further arrangements may be in train for both 2020 and 2021. It said that these are private negotiations which in the absence of agreement, are unlikely to lead to enforcement or civil proceedings at this time. The Council added that it is not disputed that the Council and the company have the power to pursue outstanding debt but that the current economic circumstances, coupled with the consequences of COVID-19 restrictions on both the debt recovery process and the court system, mean that this is not a viable option at this time. It said assessing the ability to pay is a crucial factor in these negotiations and some businesses may be better placed than others from an economical viewpoint. It argued that exposure in relation to the financial performance of the overall collection could prejudice a commitment to pay if the viability of the company is publicly questioned.

The company set out the impact of COVID-19 both on the company itself and on its member businesses. It said it is in negotiations with members based on individual circumstances and points to some of the challenges faced by the company in seeking to collect the BID levy. It again argued that the release of the information would be used to encourage non-payment of contributions and to sow discontent amongst its members.

In essence, the arguments made in support of the refusal of the request under section 36(1)(c) is that the release of the information sought could affect the outcome of the ongoing negotiations with members in relation to outstanding levy contributions. It seems to me that there is little difference between this argument and the arguments presented in respect of section 36(1)(b). I would note that the release of the information sought would disclose nothing about any ongoing negotiations. For the same reasons as I have set out in relation to the arguments made under section 36(1)(b) above, including the facts that the company is obliged to publish information on the amount of levy collected each year and that the impact of COVID-19 cannot be regarded as anything other than expected, I find that the Council has not justified its refusal of the request under section 36(1)(c).

In conclusion, therefore, I find that sections 36(1)(b) and (c) do not apply to the information sought and I direct the release of the information to the applicant. I should add that the company presented strong arguments as to why the public interest would be better served by refusing the request. However, As I have found neither section to apply, I am not required to consider the public interest test set out in section 36(3).

Decision

Having carried out a review under section 22(2) of the Freedom of Information Act 2014, I hereby annul the decision of the Council and direct the release of details of the amount of BID levy collected each month by the Council for each of the months from January 2020 to September 2020.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision.  In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.

Stephen Rafferty

Senior Investigator