Mr. Y and Údarás na Gaeltachta [2024] IEIC 121881 (05 June 2024)

Background
Scope of Review
Analysis and Findings
Decision
Right of Appeal

Whether ÚnaG was justified in refusing access to a copy of a contract between ÚnaG and a named company for the sale of another named company on the basis that sections 35(1)(a) and (b) and 36(1) of the FOI Act applied

4 June 2024

Background

In a request dated 28 January 2022, the applicant sought a copy of a contract ('the Agreement') relating to the sale by ÚnaG of Arramara Teoranta (Arramara), a seaweed harvesting company based in Galway, to Acadian Seaplants Limited (Acadian), a Canadianbased company. Acadian acquired Arramara in May 2014. In this decision, references to the positions of Acadian and Arramara are used interchangeably.

In a decision dated 25 February 2022, ÚnaG refused the request under sections 35(1)(a), 35(1)(b), 36(1)(a), 36(1)(b), and 36(1)(c) of the Act. The applicant sought an internal review of that decision, following which ÚnaG affirmed its refusal of the request. On 20 April 2022, the applicant applied to this Office for a review of ÚnaG's decision.

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 applicant's comments in his application for review and to the submissions made by ÚnaG in support of its decision. In light of the nature and contents of the record at issue, the Investigator notified Acadian of the review and invited it to make a submission on the matter. I have had regard to the submission it subsequently made. I have also had regard to the contents of the record at issue. I have decided to conclude this review by way of a formal, binding decision.

Scope of Review

This review is concerned solely with whether ÚnaG was justified in refusing access, under sections 35(1)(a) and (b) and 36(1)(a), (b) and (c) of the FOI Act, to the record sought.

Analysis and Findings

Section 35(1) of the FDOI Act provides as follows:

1. Subject to this section, a head shall refuse to grant an FOI request if-�

(a) the record concerned contains information given to an FOI body, in confidence and on the understanding that it would be treated by it as confidential (including such information as aforesaid that a person was required by law, or could have been required by the body pursuant to law, to give to the body) and, in the opinion of the head, its disclosure would be likely to prejudice the giving to the body of further similar information from the same person or other persons and it is of importance to the body that such further similar information as aforesaid should continue to be given to the body, or

(b) disclosure of the information concerned would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment (other

than a provision specified in column (3) in Part 1 or 2 of Schedule 3 of an enactment specified in that Schedule) or otherwise by law.

Having regard to the submissions made, it seems to me that section 35(1)(b) is of most relevance in this case and as such, I propose to consider that exemption first.

ÚnaG's position is that the release of the Agreement would constitute a breach of a duty of confidence provided for by a provision of the Agreement. In its submissions, it drew attention to a number of clauses within the Agreement, namely Clauses 9.2, 9.3, 15(12)(b) and 15(12)(c). It noted that Acadian is not an FOI body. It said Acadian was consulted previously in relation to an FOI request for the record and refused permission for the release of the record.

Clause 9 of the Agreement is headed Confidential Information and provides, at the relevant parts, as follows:

2. The parties acknowledge and confirm that the information contained in this Agreement is highly commercially sensitive and it is intended that the said information will remain commercially sensitive until expiry of the Put Option and/or the matters contemplated by this Agreement and the Put & Call Option Agreement.

3. During the term of this Agreement and after termination of this Agreement (for any reason whatsoever), the Seller shall with respect to any and all Confidential

Information not disclose the Confidential Information to any other person other than pursuant to Clause 9.4 and 9.5 below and with the prior written consent of the disclosing party.

4. The Seller may disclose Confidential Information to its officers and senior employees, where disclosure is otherwise required by reason of any law or regulation, or by the order of any court of competent jurisdiction.

5. The Seller may disclose Confidential Information to any professional adviser for the purpose of advising the Seller.

6. This Clause shall not apply to any Confidential Information which;

(a) is now or subsequently becomes part of the public domain other than as a result of disclosure by or other default of the receiving party or any recipient to which it has disclosed Confidential Information;

(b) the receiving party can demonstrate, by documentary evidence, was lawfully in its possession prior to the date of this Agreement and was not subject to any duty of confidentiality; or

(c) is subsequently disclosed to the receiving party on a non-confidential basis by a person who is not connected to, and does not owe any duty of confidentiality to, the disclosing party.

Clause 15(12) of the Agreement is headed Announcements/Confidentiality and provides as follows:

(a) Unless required by law or by the rules of any regulatory authority or stock exchange to which any party is subject, no public announcement, communication or circular concerning the transactions referred to in this Agreement shall be made or despatched at any time (whether before or after Completion) by any party without the prior written consent of the other parties (such consent not to be unreasonably withheld or delayed).

(b) Each party shall treat as strictly confidential all information received or obtained as a result of entering into or performing this Agreement which relates to the provisions or subject matter of this Agreement, to any other party to the Agreement or the negotiations relating to this Agreement.

(c) Any party may disclose information which would otherwise be confidential if and to the extent:

(i) it is required to dos by law or any securities exchange or regulatory or governmental body to which it is subject wherever situated;

(ii) it considers it necessary to disclose the information to its professional advisers, auditors and bankers provided that it does so on a confidential basis;

(iii) the information has come into the public domain through no fault of that party, or

(iv) each party to whom such information relates has given its consent in writing.

The term "confidential information" is defined in Clause 1.1 of the Agreement as follows:

"Confidential Information" means all information not at present in the public domain used in or otherwise relating to the business, customers or financial or other affairs of the Company including, without limitation, information relating to:

(a) the marketing of any products or services including, without limitation, customer names and lists and any other details of customers, sales targets, sales statistics, market share statistics, prices, market research reports and surveys and advertising or other promotional materials; and

(b) future projects, business development or planning, commercial relationships and negotiations;

In its submissions, Acadian referred to clause 9.2 and clause 15.12(b). Acadian indicated that while clause 9.2 refers to the expiry of the Put & Call Option Agreement, which it said expired on 24 March 2022, it maintains that the effect of the provision is wider and contemplates that the information contained in the agreement will remain confidential until expiry of the matters contemplated by the Agreement. It said there remain several ongoing obligations within the contract, including without limitation the environmental indemnity provided by ÚnaG to Acadian in section 7, the Irish Language requirements in section 15.11, and the Warranties listed in Schedule 4. It said it is the company's position that, based on clauses 9.2, 9.3 and 15.12, any disclosure of the Agreement to a third party would constitute a breach of the Agreement by ÚnaG and if such a disclosure were to take place it would have no choice but to take steps to preserve its rights against ÚnaG for breach of the Agreement.

In light of the above submissions, the Investigator in this case sought further details from Acadian in relation to the confidentiality clauses in the Agreement. The Investigator also sought further information from the company with regard to comments made by the applicant to the effect that the Agreement provided for the release of certain information on the ten-year anniversary of its signing.

In response Acadian reiterated its position that it considered that it was the intention that the provisions of clause 9.3 would last indefinitely, saying that if there was any intention to have a time-limit to this provision, it would have been provided for in the Agreement. It said that the release of the terms and conditions of the sale Agreement and other information relating to the business, financial and other affairs of Acadian and Arramara would be severely detrimental and prejudicial to both companies. Finally, Acadian said that, contrary to comments made by the applicant, it is not aware of any provision within the Agreement for the release of any information on the ten-year anniversary of the Agreement.

My Analysis

While I have strong concerns about the appropriateness of FOI bodies entering into broad confidentiality agreements such as the one at issue in this case, the effect of which is essentially to allow for the circumvention of the requirements of the FOI Act, the fact remains that by including section 35(1)(b) in the Act, the Oireachtas clearly envisaged situations where an FOI body might reasonably do so.

It seems to me that in this case, the effect of Clause 9.3 of the Agreement is that the disclosure by ÚnaG of confidential information other than in accordance with the provisions of Clauses 9.4 and/or 9.5 (which are not relevant here), at any time during the term or the Agreement or even after the termination of the Agreement, would constitute a breach of a duty of confidence owed to Acadian. As such, the question I must consider is whether the disclosure of the Agreement itself would involve the disclosure of confidential information.

As I have outlined above, for the purposes of the Agreement, the term "confidential information" is defined at Clause 1.1. While the definition contains examples of the types of information that are captured by the definition, such as information relating to product marketing, future projects, commercial relationships etc., such examples are clearly not exhaustive. The definition is broadly worded and includes "all information not at present in the public domain used in or otherwise relating to the business, customers or financial or other affairs of the Company", the company being Arramara. Moreover, Clause 15(12)(b) provides that all information received or obtained as a result of entering into the Agreement which relates to the provisions or subject matter of the Agreement are to be treated as strictly confidential.

While a very limited amount of information concerning the sale of the company is in the public domain, it seems to me that the specific details of the Agreement, which sets out the terms and conditions of the sale, are not. Having regard to the broad definition of confidential information in the Agreement, I accept that the disclosure of the details of the Agreement itself, would involve the disclosure of information relating to the company that is captured by that definition. Accordingly, I also accept that the release of the Agreement would involve a breach of a duty of confidence that is owed to Acadian. I find, therefore, that section 35(1)(b) applies to the Agreement.

Section 35(1)(b) is not subject to a public interest balancing test. However, it is established that the action for breach of confidence is itself subject to a public interest defence and this Office may consider the public interest defence in the context of section 35(1)(b). The public interest grounds which may justify or excuse a breach of a duty of confidence are quite narrow and include, for example, the exposure or avoidance of wrongdoing or danger to the public, and ensuring the maintenance of the principles of justice. In the course of the review, the applicant made submissions referencing the public interest. He argued that it is in the public interest that the contract be made public and said there was unhappiness about some aspects of the sale at the time and that this will continue if the contract is not released. I am satisfied that the interests identified are insufficient to amount to a public interest defence for breaching the duty of confidence owed in this case.

I should add, for the sake of completeness, that I have also considered the applicability of section 18(1) of the Act in this case, which provides, that "if it is practicable to do so", access to an otherwise exempt record shall be granted by preparing a copy, in such form as the head of the FOI body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). I am satisfied that any effort to identify occasional or particular parts of the Agreement for release would result in the release of a misleading version of the record.

Having found section 35(1)(b) to apply to the Agreement, it is not necessary for me to consider the applicability of the other exemptions cited for refusing the request.

Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby affirm ÚnaG's decision to refuse access, under section 35(1)(b) of the Act, to a copy of the Agreement between ÚnaG and Acadian relating to the sale by ÚnaG of Arramara.

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

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Irish Information Commissioner's Decisions
You are here: BAILII >> Databases >> Irish Information Commissioner's Decisions >> Mr. Y and Údarás na Gaeltachta [2024] IEIC 121881 (05 June 2024) URL: http://www.bailii.org/ie/cases/IEIC/2024/121881.html Cite as: [2024] IEIC 121881

Irish Information Commissioner's Decisions

Mr. Y and Údarás na Gaeltachta