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Wednesday, October 27, 2010

Queensland Special Purpose Vehicles outside scope of RTI act

In its first decision concerning the Right to Information Act, the Queensland Civil and Administrative Tribunal found the Information Commissioner erred in law in deciding that City North Infrastructure Pty Ltd (CNI), a Special Purpose Vehicle established by the government to assist in the delivery of certain infrastructure projects including the Airport Link, was a public authority and subject to the RTI act. The decision means any such company established by the Queensland Government solely under the Corporations Act, a Commonwealth act, is not subject to the RTI act, and raises a policy question concerning the extent to which government bodies created in this way should be subject to different levels of accountability and transparency than others.

The decision does not concern the status of a Government Owned Corporation or a subsidiary of a government owned corporation, both specifically included in the definition of agency in s 14 of the act. Such bodies are within the ambit of the RTI act if established as a body corporate under an Act or the Corporations Act; and declared by regulation to be a GOC (Government Owned Corporations Act 1993 s5.)

The case revolved around what constituted a public authority, defined in s 16:
Meaning of public authority
(1) In this Act, public authority means any of the following entities - …
(a) an entity - … (ii) established by government under an Act for a public purpose, whether or not the public purpose is stated in the Act.
It was common ground CNI was established by government for a public purpose and that the Act under which an entity is established, for RTI purposes, must be an Act of the Queensland Parliament. CNI is a company registered under the Corporations Act 2001. However the Information Commissioner decided it was established by government under the Financial Administration and Audit Act (FAAA), a Queensland Act, at the earlier point in time when the Treasurer’s approval to the formation of the company was granted under section 44 of that act.

Deputy President Kingham said the meaning of the words "established under an Act" was "established in accordance with an Act":
[30] In the present case the requirement imposed by the FAAA that prior approval was obtained was fulfilled and, therefore, the Coordinator General might be said to have acted consistently in conformity with the FAAA in taking the further step of applying to register the company under the Corporations Act.
[31] That is not the same thing as saying the company was established under (in accordance with) the FAAA. I accept CNI’s proposition that there must be a sufficient connection between an action taken under an Act and the legal constitution of the entity such that the entity can be said to have been established under that Act.
[32] The Treasurer’s approval to applying to register CNI, if it had not been acted upon, would not have been sufficient to establish it under the FAAA. Until it was registered under the Corporations Act, CNI did not exist.
[33] The company was brought into existence by an action undertaken by government under (in accordance with) the Corporations Act, i.e. by the application to register the company. The company was established, in the sense that it derives its legal character, by acts done in accordance with the Corporations Act, not the FAAA
Deputy President Kingham found the Information Commissioner erred in her interpretation that the words “established” and “established under an Act” encompass a process for obtaining the Treasurer’s approval under the FAAA to form a company under the Corporations Act; rejected the Information Commissioner's reliance on extrinsic material such as the Solomon Report and the Government's response to support her interpretation of s16; and erred in her reliance on the absence of CNI from Schedule 2 (which lists agencies excluded from the operation of the act) in support of interpretation of s16.

While subject to any further appeal, the decision settles the law and places Special Purpose Vehicles such as CNI outside the RTI act. But it raises a policy question about whether this is a satisfactory outcome. The Deputy President's views about the irrelevance of the Solomon Report to the task of statutory interpretation may well be correct. But the result does not sit comfortably with the discussion in the The Solomon report (at 7.1) of Government Business Enterprises. The Panel supported the idea that all statutory authorities, regardless of how they are created should be covered by the legislation, culminating in Recommendation 20:
"All bodies that are established or funded by the government or are carrying out functions on behalf of government, should be covered by FOI,unless it is in the public interest that they should not be covered."
Or the tenor of the Government's response  (The right to information report (PDF, 862 KB)) (page 6), although Special Purpose Vehicles are not mentioned specifically in either document.

Queensland Treasury's Guidelines for the Formation, Acquisition and Post Approval Monitoring of Companies set out the rules and procedures regarding establishment of such entities. The website says "The Public Accounts Committee has also recommended a Register of Public Sector Companies be established and maintained. Cooperation from relevant parties is sought to provide details needed to populate the register."

In the absence of that register I have no idea how widespread the practice is in Queensland of creating special purpose vehicles, or of the significance of the fact that this sector of government activity is beyond the reach of the RTI act as a result of this decision. Queenslanders better placed than me may choose to comment, or raise questions themselves.

1 comment:

  1. another example of governments in Australia lying to the public