Request for information relating to Government funding for upgrade of hospital

Commercial
Legislation:
Official Information Act 1982
Section 9
Legislation display text:
Official Information Act 1982, ss 9(2)(a), 9(2)(g)(i) and 9(2)(i)
Agency:
Minister of Health
Ombudsman:
Sir Brian Elwood
Case number(s):
W41207
Issue date:
Language:
English

Request for information on Government funding for the upgrade and redevelopment of Wellington Hospital—request refused on variety of grounds—majority of information released on review—interpretation of s 9(2)(i) and what constitutes ‘commercial activities’—Health and Disability Services Act 1993, s 11(2)(b)

A journalist sought a review of the decision by the Minister of Health not to make available information on Government funding for the upgrade and redevelopment of Wellington Hospital. The request was declined under six grounds, being sections 9(2)(a), 9(2)(b)(ii), 9(2)(ba)(i), 9(2)(g)(i), 9(2)(i) and 9(2)(j) of the OIA.

The Minister’s concerns over release of the relevant parts of the six documents at issue related in the main to possible damage to the relationship and negotiations between the past and present Chair and Board of Capital Coast Health (CCH), and the Minister and the Crown Company Monitoring Advisory Unit (CCMAU). Given the extent of the information that was in the public domain at that time, the view was formed that only two pieces of information could be withheld in terms of the Act. One piece of information was the name of a clinical reviewer. This was withheld in reliance upon section 9(2)(a), and the other was an expression of personal opinion, withheld in reliance upon section 9(2)(g)(i).

Apart from these two deletions, the Minister subsequently released the relevant parts of the six documents at issue to the requester.

However, in the course of the investigation and review an issue of wide principle emerged, namely, whether the Minister of Health and, in particular, hospitals are engaged in ‘commercial activities’ as envisaged by section 9(2)(i).

The nub of the issue, in terms of the analysis required under section 9(2)(i), is not whether an organisation is a ‘commercial’ one or capable of carrying out ‘commercial activities’, but whether making requested information available would prejudice ‘a commercial activity’, be it undertaken by a Minister, a Department, or any organisation subject to the OIA.

Clearly the status of a body does not determine every kind of activity it may carry out. For example, a University might have a commercial position with respect to research contracts for which it tenders to make financial gains, notwithstanding that by its nature it is not a commercial enterprise. Similarly, charities may own properties for rent, or be engaged in retailing. The profits derived may then be distributed for charitable purposes, but the activity would nevertheless be commercial, notwithstanding that a charity is not established for commercial purposes.

It is because non-commercial enterprises may undertake commercial activities, and commercial enterprises may undertake non-commercial activities that it is necessary to be able to determine whether there is a feature that attaches to a ‘commercial activity’ which distinguishes it from a ‘non-commercial activity’.

It is considered that the profit motive, the intention to make a profit, is a necessary factor that needs to exist before an activity is a ‘commercial activity’ for the purposes of the OIA. A relevant United Kingdom decision on distinguishing ‘commercial’ from ‘non-commercial’ activities is Expro Services v Smith [1991] IRLR 156. This case raised the issue of whether some catering and cleaning work contracted out by the Ministry of Defence was a ‘commercial activity’ of the Ministry’s. It was held that although the work was a ‘commercial activity’ when carried out by the contractor, it was simply an ‘authorised activity’ and not a ‘commercial activity’ when carried out by the Ministry. When carried out by the contractor it was carried out for financial gain. When carried out by the Ministry, it was not.

The case of the Mayor of Timaru v South Canterbury Electric Power Board [1928] NZLR 174 is authority for the view that a commercial activity must have a commercial purpose and that a commercial purpose requires the intention to make a profit. That approach was also taken in Calgary (City) v Alberta (Assessment Appeal Board) (1987) 77 AR 23 (QB). The Court stated that ‘…whatever other attributes an activity may have it is not a commercial activity unless in addition it has as its predominant purpose the making of a profit’.

By virtue of section 11(2)(b) of the Health and Disability Services Act 1993 every hospital and health service must operate ‘on a not-for-profit basis’. Accordingly neither the Minister of Health nor the Hospital could be said to have been engaged in ‘commercial activities’, and the reason for withholding under section 9(2)(i) had not been made out. In the light of this finding, the Minister released the information.

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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