Request by Korean company for information relating to Ministry of Defence decision not to shortlist the company

Legislation:
Official Information Act 1982
Section 12
Legislation display text:
Official Information Act 1982, s 12(1)(e)
Agency:
Ministry of Defence
Ombudsman:
Mel Smith
Case number(s):
W49368
Issue date:
Language:
English

Solicitors for Korean based company sought information on Ministry of Defence’s decision not to shortlist company in tender process—Ministry argued solicitors were agent for company which had no rights under the OIA—evidence suggested company had a place of business in New Zealand—s 12(1)(e) applied  

The Crown wanted to acquire a number of military vessels and invited tenders by way of a Registration of Interest document. The requester was a company that, with the active support of the Korean government, builds naval ships and a wide range of merchant ships. It supplied a registration of interest document to the Ministry of Defence. The company was later advised that it would not be included in the shortlist as there were concerns with the ‘financial aspects of the company and questions raised in the independent auditor’s reports’. The company’s ability to supply through-life support to vessels built by it was also questioned. In these circumstances, the company was anxious to learn more about the precise details of these concerns as it believed that its commercial credibility had been compromised by this decision of the Ministry. It therefore instructed its solicitors in New Zealand to seek certain official information from the Ministry relating to its decision not to shortlist the company.

The request was refused for various reasons under the OIA. The Ombudsman was asked to review the decision. When notifying the complaint, the Ombudsman referred the Ministry to section 23 of the OIA as possibly being relevant in the circumstances of this case and sought its comment in this regard.

In response, the Ministry raised a preliminary jurisdictional issue. It noted that while section 12 of the OIA gives certain persons rights of access to official information and section 23 gives certain persons the right to a written statement by the Ministry, the company at issue would be entitled to these rights only if it met the criteria specified in sections 12(1) and 23(2), namely, it would have to be either:

  • a New Zealand citizen;

  • a permanent resident of New Zealand;

  • in New Zealand;

  • incorporated in New Zealand; or

  • incorporated outside New Zealand but has a place of business in New Zealand.

It was the Ministry’s submission that the company did not meet any of these criteria as it was a South Korean company.

However, the Ombudsman noted that a firm of New Zealand solicitors made the original request and the Ministry addressed its response to that firm with no reference there to any jurisdictional issue. The fact that the firm was acting for an overseas company did not preclude it from making a valid request under the Act.

The Ministry argued that the request was not made by the solicitors but by the company through the agency of the solicitors and therefore any actions of the agent would be treated as being made by the corporation as principal. The Ombudsman agreed with the Ministry that, if this issue was purely a matter of agency, it is clear that a principal cannot endow its agent with a status the principal does not possess. In other words, if the solicitors in this case are to be regarded as the agent of the company, and the company does not have the status to make an OIA request under section 12(1), then the company cannot confer on its agent a status it does not possess.

In light of the above, the Ombudsman then turned to consider the status of the company. In this regard, the Ombudsman noted that in its Registration of Interest, the company was required to state its contact point. After referring to its Korean address it added and included contact details of a ‘New Zealand Agent for Naval Ship Project’. Further, in the Ministry’s evaluation of the company’s application the evaluator wrote ‘yes’ to the question of whether the applicant had fulfilled the requirement of providing ‘details of its registration and place of business in New Zealand…and the name of its representative’. Finally, the Ombudsman noted that part of the company’s ‘business’ was to have its bid accepted and there would seem no reason why part of that business should not be carried on at the premises of the company’s named representative in New Zealand.

The Ombudsman formed the view that the company did have a place of business in New Zealand and, as such, qualified under section 12(1)(e) as a person entitled to make a request under that Act.

The Ombudsman then went on to consider the substantive issues concerning disclosure of the information requested. He formed the view that the information should be released with certain deletions made. The Ministry agreed to do so and the Ombudsman concluded his enquiries.

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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