Request for copy of competitor’s licence deed

Commercial
Legislation:
Section 7
Legislation display text:
Local Government Official Information and Meetings Act 1987, s 7(2)(b)(ii)
Agency:
Publicly Funded Ferry Terminal Facility
Ombudsman:
Hon Anand Satyanand
Case number(s):
A10140
Issue date:
Language:
English

Ferry service operator requested copy of competitor’s licence deed from ferry terminal facility owner—request refused under s 7(2)(b)(ii) LGOIMA on basis release would prejudice commercial position of licensee—licensee argued that it had originally negotiated licence in atmosphere of complete commercial confidentiality with then port authority at a time when neither party was subject to LGOIMA—Ombudsman considered s 8 LGOIMA and s 75 Local Government Act 2002—neither Act contains transitional or saving provisions concerning information held by private bodies that later become subject to this legislation—request for such information should therefore be considered in same way as any other LGOIMA request—Ombudsman found no commercial prejudice likely and strong public interest in release—facility owner released information.

A certain corporate entity funded by public money to develop facilities relating to the transport network around Auckland purchased a ferry terminal facility. As the new owner of the site, the corporate entity held the relevant leases, permits and licenses to operate from the facility.

A ferry service operator wanted to operate a vehicular ferry from the newly purchased ferry terminal facility. Prior to spending significant sums of money in purchasing vessels overseas, the operator met with the new facility owner about having access to the facility. The operator said he was advised that there would be no problem, as the facility owner was required to allow competitive and open access to any facilities that it owned including the one at issue here. On the basis of that information the operator proceeded to purchase the vessels.

However, before the vessels arrived in New Zealand, the operator was advised by the facility owner that a restrictive arrangement with another ferry operator already operating from the facility had come to light and that, as a result, there were problems with access for the operator. The operator immediately sought to identify the nature and extent of this restriction by requesting a copy of the relevant information. In particular, the operator requested a copy of the lease/permit held by the other ferry operator over the use of the facilities together with other relevant correspondence. As the facility owner was an organisation subject to LGOIMA, this request was made under that legislation.

The facility owner refused to provide a copy of the licence deed under section 7(2)(b)(ii) of LGOIMA, on the basis that disclosure would be likely unreasonably to prejudice the commercial position of the other ferry operator (the licensee).

The operator then approached the Ombudsman asking that he investigate and review the decision. The operator later refined his request to the information in the licence which referred to the licensee being required to allow others to use the facility, the extent of the occupancy and the provisions relating to the defeasibility of the document.

In response, the facility owner explained that the licence at issue had originally been negotiated between a port company and the licensee. At that time neither body was subject to the official information legislation. However, by the time of the request, the role of the licensor (the former port authority) had devolved upon a local authority trading enterprise which, by virtue of section 8 of the Local Government (Elected Member Remuneration and Trading Enterprises) Amendment Act 2001, had become subject to Parts II and VII of LGOIMA as if it were a local authority named or specified in the First or Second Schedules to that Act. This enterprise held the licence in its records. In these circumstances, the facility owner did not consider it reasonable for this information to now be released, particularly when, in its view, release of the licence to the complainant would be likely unreasonably to prejudice the commercial position of the licensee.

The Ombudsman considered the detail of the licence. He noted that it contained provisions requiring the licensee to make any spare capacity at the terminal available for use by other operators. The licence also contained provisions for its defeasance in certain events, such as a breach of various conditions of the licence and changes in control of the licensee.

The Ombudsman consulted the licensee on its views regarding release of the licence. In response, the licensee also relied on the fact that when the licence was originally negotiated, the former port authority was not subject to LGOIMA, and so the parties to it were operating in a context of complete commercial confidentiality with no prospect that the information about the deed or its terms could be made public. Further, it considered that releasing the information contained in the licence would give the licensee’s ‘arch competitor’ knowledge of an important cost component of its operations and the restrictions under which it must operate, in circumstances where this information would not normally be available.

It seemed to the Ombudsman that the licensee was effectively arguing that information of a confidential commercial nature that came into existence before the official information legislation applied to the facility owner, should be entitled to special protection in the event that a request under LGOIMA was later made for the information. The Ombudsman therefore considered precisely what effect LGOIMA had on the facility owner and other ‘council controlled organisations’ when the Act was applied to them from 15 December 2001. It seemed clear that if Parliament had intended that any special protection was to be available in the case of such organisations, whether for their previous or their future transactions or for information then held by them or coming into existence later, it could be expected to have included saving or transitional provisions to that effect. However, the Ombudsman noted that no saving or transitional provisions were included, either in 2001 or again in December 2002 when the present section 74(1) of the Local Government Act 2002 was enacted.

Further, given that the complainant had refined his request, to exclude the financial figures disclosing the licence fee, the Ombudsman was not convinced that release of the remaining information would unreasonably prejudice the commercial position of the licensee.

The Ombudsman also identified a strong public interest in making information available about:

  • the extent to which public transport facilities, supported wholly or in part by public funds, are either available for use by transport operators or subject to restrictions on their availability; and

  • any matter which might affect that availability, including matters which might lead to the imposition or removal of such restrictions.

After considering the information falling within the scope of the complainant’s refined request, the Ombudsman considered that it clearly fell within one or other of these categories. It seemed to the Ombudsman that release of information of this nature would promote the accountability of the public bodies responsible for the facilities.

The Ombudsman formed the view that there was no good reason under LGOIMA for withholding the information requested by the complainant. It was his view that there was a strong public interest in release of this information in order to promote the accountability of the public body responsible for the facility at issue.

The Ombudsman advised both the facility owner and the licensee of his view. The licensee made further submissions essentially on the same grounds as it had done previously. After considering these submissions, the Ombudsman was not persuaded to alter his view and advised the facility owner of his final view.

The facility owner then released the information to the complainant and the Ombudsman concluded his enquiries on the basis that the complaint had been resolved.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

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