Application of Section 46 FOI Act

Relevant considerations

1. Would disclosure ‘found an action’?

The Information Commissioner considered the words ‘found an action for breach of confidence’ in section 46(1)(a) of the FOI Act require consideration of a hypothetical legal action in which there is a clearly identifiable plaintiff, with appropriate standing and in which reliance is placed upon one or more of the following causes of action:2

  • breach of a contractual obligation of confidence
  • breach of an equitable obligation of confidence
  • breach of a fiduciary duty of confidence.

An obligation of confidence, whether equitable or contractual, can also be overridden by compulsion of law, in particular by a statutory provision compelling disclosure of information.3

a) Action

The words of the legislation should be the starting point for interpretation of the breach of confidence exemption.4 The word ‘action’ has a legal meaning described in the Oxford Companion to Law as:5

A legal proceeding whereby one person seeks, in a civil court of justice by civil procedure, to enforce a right against, restrain the commission of a wrong, or obtain a legal remedy from, another person. … The general rule is that a person has a cause or ground of action if another infringes any private right vested in him…

An ‘action’ is also referred to as a ‘cause of action’, which Wilson J in Do Carmo v Ford Excavations Pty Ltd6 interpreted as:

…simply the fact or combination of facts which gives rise to a right to sue.

b) Found

The word ‘found’ may be interpreted according to its ordinary meaning7 from the Shorter Oxford English Dictionary8 as:

Establish (something immaterial) on a firm basis, support, principle, etc; base, ground; serve as a basis for.

c) Defences

In B and Brisbane North Regional Health Authority,9 the Information Commissioner questioned whether there existed a threshold issue of statutory construction, as to whether the words ‘found an action’, directed attention only to the elements required to establish an action for breach of confidence, without a consideration of defences, or whether the words required defences to be taken into account.10 However, the Information Commissioner interpreted the phrase ‘found an action’ to require defences to breach of confidence to be taken into account, when determining whether an action could be founded. He formed this view based on the general scheme of the FOI Act (in which public interest considerations and the balancing of these interests are predominant) and the decision reached by Gummow J in Corrs Pavey Whiting.11

It has been accepted in Australia that in specific circumstances, the iniquity exception may apply to deny protection to information that would otherwise be confidential. Mason J in Commonwealth of Australia v John Fairfax & Sons Ltd, considered;

the defence [of iniquity] applies to disclosures of things done in breach of national security, in breach of the law (including fraud) and to disclosure of matters which involve danger to the public.

A decision of the Full High Court has held that a separate public interest exception may also apply in respect of obligations of confidence claimed to attach to information supplied to a government.12 However, a broad public interest exception is not widely accepted in Australia.13

Subsequent cases have further narrowed the circumstances in which the defence of iniquity will be successful. In the decision of AFL and Anor v The Age Company Limited and Ors,14 Kellam J considered that in order to rely on the iniquity exception, it is necessary for the person relying on the defence to establish that:

(a) the proposed disclosure will in fact disclose the existence of or the real likelihood of, the existence of an iniquity that is a crime, civil wrong or serious misdeed of public importance;

(b) that the iniquity to be disclosed affects the community as a whole, or affects the public welfare; and

(c) that the person who is seeking to protect the confidence is doing so in order to prevent disclosure to a third party with a real and direct interest in redressing the alleged crime, wrong or misdeed.

2. Is that action for breach of confidence?

In B and Brisbane North Regional Health Authority,15 the Information Commissioner considered the following causes of action:

  • a cause of action for breach of a contractual obligation of confidence
  • a cause of action for a breach of an equitable obligation of confidence
  • a cause of action for breach of a fiduciary duty of confidence and fidelity

The Information Commissioner considered the word ‘confidence’ must be used in its technical legal sense:16

A confidence is formed whenever one party (‘the confider’) imparts to another (‘the confidant’) private or secret matters on the express or implied understanding that the communication is for a restricted purpose.

a) Contractual obligation of confidence

In B and Brisbane North Regional Health Authority,17 the Information Commissioner questioned whether an action for breach of a contractual confidentiality term would satisfy the description of an action for breach of confidence. He considered that an express contractual obligation of confidence ordinarily arises in circumstances where the parties wish to define clearly their respective rights and obligations with respect to the use of the confidential information. However, he considered that the mere promise to keep certain information secret, unsupported by consideration, is incapable of amounting to a contractual obligation of confidence. Whether such a promise would amount to a contractual obligation of confidence would depend on the application of the five equitable principles (considered below under ‘Equitable obligation of confidence’).18

In the absence of an express term of confidence, a contractual obligation may be founded on an implied term in an existing contractual relationship.19 The courts have also managed to construct an implied contract even where no contract existed between the parties, such as when confidential information is divulged with a view to a future business arrangements that did not eventuate.20

An express contractual obligation of confidence must be valid at law before it is able to be enforced at law or in equity.21

b) Equitable obligation of confidence

In B and Brisbane North Regional Health Authority,22 the Information Commissioner discussed the criteria which must be satisfied, in order to establish a case for protection in equity of confidential information:

i) The information must be capable of being specifically identifiable as information that is secret

It is necessary to specifically identify the information in issue in order to establish that it is secret, rather than generally available information.23 This also has utility for the FOI Act, as matter that is claimed to be exempt under section 46(1)(a) of the FOI Act must be clearly specified and differentiated from other matter which is available for access.24

ii) The information must possess the necessary quality of confidence

If information has already been disclosed to the applicant (for example read to the applicant), section 46(1)(a) of the FOI Act cannot be used as the information is no longer confidential and will therefore not found an action.25

An action for breach of confidence is not an action for the protection of confidential information, but rather to prevent unconscionable conduct. The basis of the court’s intervention is not in relation to the information itself, but rather the threatened or actual breach of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained.26

An action for breach of confidence cannot be founded if the information is common knowledge or publicly available, as the confider cannot be said to have placed any special faith in the confidant when making the communication.27 For information to be confidential information, it must not be common knowledge or in the public domain,28 or be mere ‘trivial tittle-tattle’.29

iii) The information must have been communicated in such circumstances so as to import an obligation of confidence

It is necessary to evaluate the whole of the relevant circumstances in which the confidential information was imparted before determining that a confidant should be fixed with an enforceable obligation of confidence.30 The relevant circumstances will include (but are not limited to):

  • the nature of the relationship between the parties (for example, a fiduciary relationship)
  • the nature and sensitivity of the information
  • the purpose for which the information was communicated to the relevant agency or Minister
  • the nature and extent of any detriment to the interests of the information supplier that would follow from an unauthorised disclosure of the information
  • the circumstances relating to its communication

It is not necessary that there be any express promise of confidential treatment, as an obligation of confidence can be inferred from the circumstances.31 It is not possible for the confider’s conduct to unilaterally impose an obligation on the confidant by merely labelling information as confidential, if the information lacks the requisite degree of secrecy.32

An obligation of confidence may also attach to a party not privy to the original disclosure, who improperly obtains confidential information.33

iv) Actual or threatened misuse of the confidential information

The relevant enquiry is whether disclosure would involve a misuse of the confidential information.34 An obligation of confidence can be waived by express or implied consent of the confider.35

v) Detriment of the Plaintiff

Whether or not detriment is required to establish an action for breach of confidence, appears to depend on whether the plaintiff is a government or private plaintiff.

Government Plaintiff

Where there is a government plaintiff in an equitable action for breach of confidence, it must establish as an element that disclosure would be detrimental to the public interest.36 This is because the Government holds information in a representative capacity and therefore must justify to a higher standard the secrecy of information in their possession.37

Private Plaintiff

The requirement of detriment for a non-government or private plaintiff is questionable, as equity acts in respect of the confidence, not to recover loss.38

However, the High Court authority from Commonwealth of Australia v John Fairfax & Sons Limited and Others39 provides that detriment is an essential requirement for an equitable breach of confidence. Mason J in Commonwealth v John Fairfax & Sons Ltd40 stated that to succeed in an action for breach of confidence a plaintiff must establish detriment. However, this appears to misconstrue the judgement of Megarry J in Coco v A N Clark (Engineers) Ltd,41 as in that case his Honour expressly questioned whether a plaintiff would be required to demonstrate detriment in all cases. Two appellate decisions have subsequently questioned whether such a requirement is needed.42 Further it should be noted that Commonwealth of Australia v John Fairfax & Sons Limited and Others,43 concerned a government plaintiff and not a private plaintiff.

However, the requirement of detriment need not be pecuniary in nature and is easily established.44 The detriment can be mere embarrassment, a loss of privacy, or an indirect detriment.45

c) Fiduciary duty of confidence and fidelity

In B and Brisbane North Regional Health Authority,46 the Information Commissioner considered that there is no need, at least for the purposes of section 46(1)(a) of the FOI Act to differentiate between a cause of action for breach of an equitable duty of confidence and a cause of action for breach of a fiduciary duty of confidence and fidelity. Gurry considers:47

It has become meaningless to speak of fiduciaries as a separate category of confidants amongst those who are generally bound by an obligation of confidence … The correct view here seems to be that recognition of a position as carrying certain fiduciary obligations serves only to establish the existence of an obligation of confidence ‘with particular force’. In other respects, the principles which determine whether there is an actionable cause for breach of confidence remain unaffected.

This approach was specifically endorsed by McHugh JA in Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd.48

2 B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraphs 43 and 44.
3Smorgon v ANZ, FCT v Smorgon (1976) 134 CLR 475 at paragraph 486-490; Holt Reeves and Department of Education (1998) 4 QAR 310 at paragraph 49-50.
4Callejo and Department of Immigration and Citizenship [2010] AATA 244 at paragraph 152.
5David M Walker, Oxford Companion to Law, Oxford University Press, 1980 at 20.
6Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234.
7 Callejo and Department of Immigration and Citizenship [2010] AATA 244 at paragraph 156.
8 Shorter Oxford English Dictionary, 5th Edition, Oxford University Press, 2005.
9B and Brisbane North Regional Health Authority (1994) 1 QAR 279, at paragraph 119.
10B and Brisbane North Regional Health Authority (1994) 1 QAR 279, at paragraph 119.  
11Corrs Pavey Whiting and Byrne v Collector of Customs, Victoria (1987) 74 ALR 428.
12Esso Australia Resources Limited and Ors v Plowman (1995) 183 CLR 10 at paragraph 67.
13Australian Government Solicitor, Legal Briefing No. 64, 4 July 2002.
14AFL and Anor v The Age Company Limited and Ors [2006] VSC 308 at 69.
15B and Brisbane North Regional Health Authority (1994) 1 QAR 279, at paragraph 43.
16 F Gurry “Breach of Confidence” in P Finn (Ed.) Essays in Equity; Law Book Company, (1985, p 111).
17B and Brisbane North Regional Health Authority (1994) 1 QAR 279, at paragraph 45.
18B and Brisbane North Regional Health Authority (1994) 1 QAR 279, at paragraph 45.
19B and Brisbane North Regional Health Authority (1994) 1 QAR 279, at paragraph 46.
20Mechanical and General Inventions Co Ltd and Lehwess v Austin & Austin Motor Co Ltd [1935] AC 346.
21Corrs Pavey Whiting & Byrne v Collector of Customs (Victoria) & Anor (1987) 74 ALR 428 at paragraph 449.  
22B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 43.  
23B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 61.  
24B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 63.
25Shaw and the University of Queensland (1995) 3 QAR 107 at paragraph 16-25; Kupr and Department of Primary Industries (1999) 5 QAR 140 at paragraph 24-25 and 42.
26B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 64.  
27B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 64.
28Johns v Australian Securities Commission (1993) 178 CLR 408 at paragraph 460-461 per Gaudron J.  
29Coco v A N Clark (Engineers) Ltd [1969] RPC 41.  
30B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 85.
31B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 90.  
32B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 91.  
33B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 97-98.
34B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 103.
35B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 105.
36Commonwealth of Australia v John Fairfax & Sons Limited and Others (1981) 55 ALJR 45 at paragraph 50-52.
37Commonwealth of Australia v John Fairfax & Sons Limited and Others (1981) 55 ALJR 45 at paragraph 50-52.
38Smith Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health (1990) 95 ALR 87.  
39Commonwealth of Australia v John Fairfax & Sons Limited and Others (1981) 55 ALJR 45.
40Commonwealth of Australia v John Fairfax & Sons Limited and Others (1981) 55 ALJR 45 at paragraphs 50-52, (citing Coco v A N Clark (Engineers) Ltd [1969] RPC 41 as authority)  
41 Coco v A N Clark (Engineers) Ltd [1969] RPC 41.
42NP Generations Pty Ltd v Fenely (2001) 80 SASR 151; National Roads and Motorists’ Assoication Ltd v Geeson (2001) 40 ACSR 1 at paragraph 58.  
43Commonwealth of Australia v John Fairfax & Sons Limited and Others (1981) 55 ALJR 45.  
44B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 111.
45 Robert Dean, The Law of Trade Secrets, Law Book Company, 1990 at pages 177-178.
46B and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph 53.
47 F Gurry “Breach of Confidence” in P Finn (Ed.) Essays in Equity; Law Book Company, (1985) at pages158-162.
48Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 75 ALR 353 at 456.

Last updated: March 26, 2012