Atlantic Lottery cORPORATION Inc. Appellant And: Her Majesty in Right of newfoundland v. labrador, 2018 NLSC 133

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Atlantic Lottery Corporation Inc. v. Newfoundland and Labrador (Finance) , 2018 NLSC 133 Date : June 19, 2018 Docket : 201701G2004 Between: Atlantic Lottery cORPORATION Inc. Appellant And: Her Majesty in Right of newfoundland and labrador , AS REPRESENTED BY THE MINISTER OF FINANCE RESPONDENT AND: DONOVAN MOLLOY, Q.C. IN HIS CAPACITY AS THE INFORMATION AND PRIVACY COMMISSIONER OF NEWFOUNDLAND AND LABRADOR INTERVENOR Before: Justice David B.

Orsborn On Appeal From: A Decision of the Information and Privacy Commissioner of Newfoundland and Labrador pursuant to the Access to Information and Protection of Privacy Act, 2015 , File # 0005-066-16-016 dated the 8th day of February, 2017. Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: June 4, 2018

Summary: Atlantic Lottery appealed the decision of a public body – the Department of Finance of the government of Newfoundland and Labrador – to release certain information pursuant to an access to information request. The information requested included certain net revenue information retrieved by ALC from video lottery terminals located in various retail establishments throughout the province. ALC argued that the decision to release should be reconsidered because the retailers were not given notice of the request nor an opportunity to argue that the information should not be released.

Held; the appeal was dismissed. ALC had no standing to bring the appeal to protect the interests of the retailers. In any event, the Act is complete as a code; it contains no right of appeal for a failure to give notice nor any provision allowing for appellate relief from a failure to give notice. In obiter , the Court discussed the extent of the public body’s obligation to give notice to third parties. Appearances: J. Alexander Templeton Appearing on behalf of the Appellant David G. Rodgers Appearing on behalf of the Respondent Andrew A.

Fitzgerald Appearing on behalf of the Intervenor Authorities Cited: CASES CONSIDERED: Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3 STATUTES CONSIDERED: Access to Information and Protection of Privacy Act, 2015 , S.N.L. 2015, c.

A-1.2 REASONS FOR JUDGMENT Orsborn, J. : INTRODUCTION [ 1 ] The Atlantic Lottery Corporation (ALC) is caught between a legal rock and a commercial hard place. [ 2 ] ALC received notice from the Department of Finance of the government of Newfoundland and Labrador (the “Department”) of an access to information request under the Access to Information and Protection of Privacy Act, 2015 , S.N.L. 2015, c. A-1.2 (the “ Act ).

The request asked for correspondence for the past two years relating to “the operation of and revenue from video lottery terminals” (“VLTs”) in the province. [ 3 ] ALC responded to the request by forwarding information to the Department (the “public body”) and objecting to the grant of access to certain information it considered confidential, including information referred to as “Video Lottery Retailer Names; Locations; Net Revenue” (collectively “NR”). On review, the Information and Privacy Commissioner (“Commissioner”) concluded that the NR was not excepted from disclosure and recommended its release.

The Department agreed. [ 4 ] ALC has now appealed the Department’s decision to grant access to the NR, saying the provision of notice of the request to the various retailers is a precondition to release of the information and that, since no notice was given, any release should be delayed until the retailers have had the opportunity to argue that the information is excepted from disclosure. issues [ 5 ] The respondent and intervenor are on common ground and raise issues of standing and of the availability of the appeal

process (and related relief) for questions of insufficiency of notice.

They say that if it is necessary to consider the appeal as a substantive appeal of a decision to grant access, ALC has not in any event met its burden of establishing the information is an exception to the general right of access. information in QUESTION [ 6 ] In his report, the Commissioner explained the nature and production of the NR - at paragraphs 14 to 15: [14] … VLTs are installed in licensed establishments, or “retailers” in the province under contracts with the Third Party [ALC] that owns, installs and operates them. “Net Revenue” means “cash in minus cash out” – that is, the figure obtained by taking all of the money put into the VLTs in the establishment by players during a particular period, and subtracting all of the money paid out in winnings, by the same VLTs during the same period.

Commissions to the retailer, expenses and profits of the Third Party, and payments to the province, all come out of net revenue. [15] The “Net Revenue” information is not created or provided by the establishment in which the VLTs are located. It is created electronically by the operations of each individual VLT, and transmitted directly and securely by high-speed internet connection to the Third Party. It cannot be altered in any way by the retailer. … [ 7 ] In its submission to the Commissioner ALC said: ALC relies on

section 39 of the ATIPP Act in not consenting to the release of this information. The information contains details which are commercially and financially sensitive in nature (pursuant to section 39(1)(a)(ii); (b); (c)(i)(ii)(iii) the disclosure of which would prove harmful to business interests of the respective retailers and ALC, and may result in similar information no longer being supplied.

Specifically, the disclosure of these details would provide a competitive advantage to other interested parties pursuing similar business opportunities resulting in an undue financial loss to the respective retailers, ALC and its Shareholders and financial gain to others. The information that is being requested is proprietary information belonging exclusively to ALC that is deemed to be highly valuable and confidential corporate asset of ALC and as such provides ALC with a competitive advantage.

Information of this nature derives economic value from not being generally known and / or readily accessible by the public. In addition, the release would disclose proprietary and / or commercially competitive information in our retailer network areas in which ALC conducts business and seeks business opportunities. This could result in financial loss to both the retailers and ALC. It could also place the retailers and ALC in a situation where they could be competitively disadvantaged.

In addition, ALC relies on section 40(1) of the ATIPP Act in not consenting to the release of this information as it contains details about retailers’ net revenue. The retailer name and location would most certainly connect with those individuals who own these locations resulting in an unnecessary invasion of the individuals’ personal privacy with respect to their financial information. [ 8 ] Nowhere in ALC’s submission, nor in its earlier correspondence to the Department, does ALC suggest that notice should be given to the retailers. the act [ 9 ] Section 3(1)(a), (

c) and (2)(c)(iii): 3(1) The purpose of this Act is to facilitate democracy through (

a) ensuring that citizens have the information required to participate meaningfully in the democratic process; … (

c) protecting the privacy of individuals with respect to personal information about themselves held and used by public bodies. 3(2) The purpose is to be achieved by … (

c) specifying the limited exceptions to the rights of access and correction that are necessary to

… (iii) protect from harm the confidential proprietary and other rights of third parties; [ 10 ]

Section 8 grants a general right of access to information other than that excepted from disclosure; some exceptions are mandatory, others discretionary. This decision concerns only the mandatory exceptions under sections 39 and 40: 39(1) The head of a public body shall refuse to disclose to an applicant information (

a) that would reveal (

i) trade secrets of a third party, or (ii) commercial, financial, labour relations, scientific or technical information of a third party; (

b) that is supplied, implicitly or explicitly, in confidence; and (

c) the disclosure of which could reasonably be expected to (

i) harm significantly the competitive position or interfere significantly with the negotiating position of the third party, (ii) result in similar information no longer being supplied to the public body when it is in the public interest that similar information continue to be supplied, (iii) result in undue financial loss or gain to any person, or (iv) reveal information supplied to, or the report of, an arbitrator, mediator, labour relations officer or other person or body appointed to resolve or inquire into a labour relations dispute. 40(1) The head of a public body shall refuse to disclose personal information to an applicant where the disclosure would be an unreasonable invasion of a third party's personal privacy. [ 11 ] The request is made to the public body, here the Department, which in turn must consider, pursuant to

section 19, whether third parties should be notified. Third party is defined expansively in paragraph 2(cc) as a person other than the requestor or a public body. The notice provision: 19(1) Where the head of a public body intends to grant access to a record or part of a record that the head has reason to believe contains information that might be excepted from disclosure under

section 39 or 40, the head shall make every reasonable effort to notify the third party. [ 12 ] The Act establishes time limits for a response and allows for a requestor or a third party (section 42) to ask the Commissioner to investigate a decision of a public body to grant or refuse access; the Commissioner may then make a recommendation to which the public body is required to respond and in turn decide whether or not to grant the requested access (section 49). [ 13 ] There are various avenues of appeal. [ 14 ] Both the requestor and a third party can appeal directly to the Trial Division (now the Supreme Court, General Division) rather than requesting the Commissioner to investigate the request or grant. 52(1) Where an applicant has made a request to a public body for access to a record or correction of personal information and has not filed a complaint with the commissioner under

section 42, the applicant may appeal the decision, act or failure to act of the head of the public body that relates to the request directly to the Trial Division.

53(1) A third party informed under

section 19 of a decision of the head of a public body to grant access to a record or part of a record in response to a request may appeal the decision directly to the Trial Division. [ 15 ] Neither of these routes of appeal is directly relevant here. [ 16 ] ALC’s appeal is brought under

section 54: 54. Appeal of public body decision after receipt of commissioner's recommendation An applicant or a third party may, not later than 10 business days after receipt of a decision of the head of the public body under

section 49, commence an appeal in the Trial Division of the head's decision to (

a) grant or refuse access to the record or part of the record; or … [ 17 ] The Commissioner may intervene in the appeal as he did here. (ss. 56(3)) [ 18 ] The court’s conduct of the appeal (in part): 59. Conduct of appeal 59(1) The Trial Division shall review the decision, act or failure to act of the head of a public body that relates to a request for access to a record or correction of personal information under this Act as a new matter and may receive evidence by affidavit. 59(2) The burden of proof in

section 43 applies, with the necessary modifications, to an appeal. [ 19 ] The possible appellate dispositions (in part): 60. Disposition of appeal 60(1) On hearing an appeal the Trial Division may (

a) where it determines that the head of the public body is authorized to refuse access to a record under this Part and, where applicable, it has not been clearly demonstrated that the public interest in disclosure of the information outweighs the reason for the exception, dismiss the appeal; (

b) where it determines that the head of the public body is required to refuse access to a record under this Part, dismiss the appeal; or (

c) where it determines that the head is not authorized or required to refuse access to all or part of a record under this Part, (

i) order the head of the public body to give the applicant access to all or part of the record, and (ii) make an order that the court considers appropriate. commissioner’s recommendation and alC’s appeal [ 20 ] The Commissioner concluded that the retailers had no proprietary interest in the NR information and were thus not a third party for the purposes of

section 39. He found that the release of the information, although considered financial or commercial, would not harm ALC and that the information was not “personal information” so as to engage the exception in

section 40. [ 21 ] Of this he said, at paragraph 24: [24] The Third Party has also claimed

section 40 (disclosure harmful to personal privacy) as a basis for withholding the information in the “Net Revenue” table that consists of the name of the establishment and the community in which it is located. It is my view that this is information about business, not personal information. It is true that many of the establishments have names that appear to relate to

persons, including many whom are fictional, historical and other such characters. To the extent that the information in the table can be related to real individuals, this is not a basis to withhold information about individuals acting in their business capacity, and not their personal capacity, so

section 40 does not apply. [ 22 ] As noted, the Department accepted the recommendation of the Commissioner to grant access. ALC appealed, claiming that the Department should have identified the retailers as third parties and should have notified them of their request for access. ALC says this failure deprived the retailers of their statutory procedural rights and accordingly nullifies the decision to grant access.

ALC asks that the matter be sent back to the Department with a direction to notify the retailers and “reprocess” the access to information request. discussion [ 23 ] To its credit, ALC recognizes that this appeal raises a novel issue. ALC has a business and contractual relationship with numerous retailers, none of whom, apparently, is aware of the request for information or the subsequent events, including this appeal. ALC is seeking to protect not its own financial interests, but the interests of the retailers who house the VLTs.

As noted, the NR information includes net VLT revenue by retailer establishment, from which may be derived some assessment of relative customer activity in the various establishments and, conceivably, some sense of the commissions to which a particular retailer is entitled as a result of the VLT revenue. [ 24 ] ALC is, in essence, bringing the appeal on behalf of retailers who are not parties to the appeal and who, presumably, have no knowledge of it.

As argued by the Department and the Commissioner, there are issues relating to ALC’s ability to even bring the appeal; ALC is caught between the validity of those issues and its legitimate desire to do what it can to protect the retailers and its relationship with them. [ 25 ] Does ALC have standing to bring an appeal claiming a lack of notice to other persons (the retailers)? In my view, with some reluctance, the answer is no. [ 26 ] The Act is a complete code governing the right of access to information held by public bodies.

The appeal provisions reflect rights given by the Act ; rights of appeal, grounds of appeal and available relief in appeal proceedings are all set out in some detail in the Act and must be interpreted by the Court within the context and purpose of the Act read as a whole. [ 27 ] I pause to note that this present appeal engages only the appeal and related provisions of the Act ; I express no opinion on the availability of judicial review in the context of access to information requests. [ 28 ] The complaint here is that the retailers with VLTs in their premises received no notice of the potential grant of access to the NR information.

On appeal, whether or not the retailers are third parties who are entitled by virtue of

section 39 to have their information excepted from release is a matter for the retailers. [ 29 ] But how, it is quite properly asked, can the retailers bring or participate in an appeal of which they know nothing? [ 30 ] Part of the concern raised by this issue is addressed in

section 19, about which I will say more in a moment. [ 31 ] The appeal provisions are carefully circumscribed, both as to who may appeal and the grounds upon which an appeal may be brought. Here, ALC has brought its appeal under subsection 54(a). That subsection allows an appeal only where the challenge is to a grant or refusal of access to information. Read in the context of sections 59 and 60, such an appeal is concerned only with (

i) whether or not the information is excepted from disclosure or, (ii) where disclosure is not excepted but refusal authorized, whether the public interest merits disclosure. [ 32 ] Nowhere in any of the appeal provisions is there any reference to an appeal – by anyone – based on an issue of notice. As noted earlier, the Act is a complete code on the statutory regime governing access to information, and the court cannot expand the availability of appellate relief beyond that provided by the Act. [ 33 ] ALC did suggest that the reference to “failure to act” in subsection 59(1) allows the court to review, on appeal, a failure to give notice. Leaving aside the fact that

section 59 refers only to the conduct of the appeal and not to the available substantive grounds of appeal in sections 52-54, the phrase “failure to act” is taken directly from subsection 52(1) – a direct appeal by a requestor – and relates back to provisions such as

section 16, which deem a refusal in the event of the failure of the public body to respond to a request within the prescribed time limit. ALC cannot appeal under subsection 54(

a) a “failure to act.” [ 34 ] It is not necessary for the disposition of this appeal to determine whether the NR information is owned by the retailers. The case law is clear that to come within the

section 39 exception the information must be “of a third party” – i.e. proprietary information of a third party.

In its submission to the Commission, as already noted, ALC wrote that “the information that is being requested is proprietary information belonging exclusively to ALC that is deemed to be a highly valuable and confidential corporate asset of ALC…” In the face of this assertion, it would be difficult to maintain that the information is owned by the retailers; nonetheless, I express no final opinion on that matter. [ 35 ] The unfortunate fact is that if information is released – without notice - a third party may well be harmed. In Merck Frosst Canada Ltd. v.

Canada (Health) , 2012 SCC 3 , Cromwell, J. said at paragraph 72: The institutional head cannot repent after the fact from an ill-advised decision to disclose. Disclosure without notice and any harm that might follow are irreversible. [ 36 ] The Act specifically addresses and limits the circumstances under which relief may be available for a failure to give notice:

114(1) An action does not lie against the government of the province, a public body, the head of a public body, an elected or appointed official of a local public body or a person acting for or under the direction of the head of a public body for damages resulting from … (

b) the failure to give a notice required by this Act where reasonable care is taken to ensure that notices are given. [ 37 ] Apart from an inability to bring an appeal on behalf of other persons, neither ALC – nor any other person – can bring an appeal complaining about an absence of notice. As noted, subsection 114(1) limits the availability of a civil action based on a lack of notice. The legislation has clearly addressed the issue of a failure to provide notice and determined that a claim for damages is available, but only in limited circumstances. [ 38 ] I have concluded that this appeal must fail because: (

i) ALC has no standing to bring an appeal on behalf of its retailers; (ii) the Act provides specific and limited grounds for appeal - a failure to give notice is not a specified ground; and (iii) (related to sub(ii)), there is no statutory relief for a failure to give notice. [ 39 ] The parties nevertheless did address the statutory provisions regarding notice and, as Cromwell, J. did in Merck , I will offer some comments. [ 40 ] As is clear from the decision in Merck , a third party’s only opportunity o avoid the possible harm flowing from a disclosure of confidential information is through the receipt of notice of the potential disclosure and an opportunity to make representations on the issue.

The availability of only a limited after-the-fact civil remedy highlights the need for careful attention to the disclosure provisions of the Act . The Act places on the head of the public body, upon a receipt of an access to information request, the responsibility to review the requested information to determine whether the excepted information of a third party may be involved. I repeat the statutory obligation: 19(1) Where the head of a public body intends to grant access to a record or part of a record that the head has reason to believe contains information that might be excepted from disclosure under

section 39 or 40, the head shall make every reasonable effort to notify the third party. [ 41 ] In Merck , Cromwell J. considered in some detail the responsibility placed on the head of a public body when in receipt of a request for information. Although his views on the point were not strictly necessary for the decision in Merck , it is clear that they were carefully considered comments given with the intention of providing the guidance of the Supreme Court to those interpreting and applying freedom of information legislation. [ 42 ] The language of the statute under consideration in Merck is substantially similar to that in

section 19; I consider Merck to be binding authority on the point. [ 43 ] Cromwell, J. (at para. 71) identified the four choices open to the head of a public body under

section 19: (

i) disclose the requested information without notice; (ii) refuse to disclose the requested information without notice; (iii) form an intention to disclose severed information without notice; or (iv) give notice because there is reason to believe the requested information might contain excepted material. [ 44 ] Of disclosure without notice, he says at paragraph 72: 72 The practical realities as well as the text of the notice provision in s. 27(1) suggest a high threshold for disclosure without notice.

Such disclosure is only justified in clear cases, that is where the head, reviewing all the relevant evidence before him or her, concludes that there is no reason to believe that the record might contain material referred to in s. 20(1). The institutional head cannot repent after the fact from an ill-advised decision to disclose. Disclosure without notice and any harm that might follow are irreversible. Giving notice in all but clear cases reduces the risk of irremediable harm to the third party through inappropriate disclosure.

Moreover, the institutional head may not have enough information to make a correct judgment about whether the information is exempt; the input of the third party may be required in order for the institutional head's decision to be properly informed.

It is, therefore, both prudent and consistent with the text of the Act for the institutional head to disclose without notice only where the exemptions clearly cannot apply. [ 45 ] When discussing what is needed to trigger an obligation to give notice, Cromwell, J. refers to a “fairly low threshold.” He contrasts the clear situation when notice is not required – the high threshold having been met – with the less clear situation and stresses that ‘reason to believe’ does not require the head to form an opinion on the particular exception.

He said at paragraphs 77 – 79: 77 As discussed earlier, in order to disclose third party information without giving notice, the head must have no reason to believe that the information might fall within the exemptions under s.

20(1). Conversely, in order to refuse disclosure without notice, the head must have no reason to believe that the record could be subject to disclosure. If the information does not fall within one of these clear categories, notice must be given. I would therefore interpret the phrase "intends to disclose" as referring to situations which fall between those in which the head concludes that neither disclosure nor refusal of disclosure without notice is required. In other words, the head "intends to disclose" a record "that the head ... has reason to believe might contain" exempted information unless the head concludes either (

a) that there is no reason to believe that it might contain exempted information (in which case disclosure without notice is required) or (

b) that he or she has no reason to believe that disclosure could be required by the Act (in which case refusal of disclosure without notice is required). To the extent that the reasons of the Court of Appeal, at para. 34, suggest the head must have actually formed an opinion on the matter as opposed to simply having no "reason to believe", I respectfully disagree. 78 The approach I propose sets quite a low threshold for the requirement of giving notice.

This is not only consistent with the text of the Act , but properly reflects the balance the Act strikes between disclosure and protection of third parties. 79 Given the nature of the exemptions in issue — trade secrets, financial and other confidential information etc. — the third party whose information is being considered is generally in a better position than the head of the institution to identify information that falls within one of the s. 20(1) exemptions.

The third party knows and understands the industry in which it participates and has an intimate knowledge of the specific information, how it has been treated and the possible harm that could come from its disclosure. … [ 46 ] He then recognizes that the giving of notice is an important protection for third parties. At paragraph 80: Moreover, observing a low threshold for third party notice ensures procedural fairness and reduces the risk that exempted information may be disclosed by mistake. [ 47 ] What review must the head of a public body undertake to satisfy the review contemplated by

section 19? Cromwell, J. addresses this at paragraphs 87 – 88: 87 There are important policy and practical considerations that must be balanced in order to decide what sort of review is required of the head when deciding to give notice. First, information should be disclosed whenever required by the Act . Second, third party confidential commercial information must receive the protection which the Act intends for it. Third, it is the duty of the institutional head to make the disclosure decision and respect the rights of third parties without simply shifting that responsibility onto the third party.

While the head will often require the assistance of the third party in order to reach a decision about how the Act ought to apply, the duty to decide whether to disclose or not remains with the head. The head does not discharge that duty by simply giving notice at the first sign of potentially exempted information and leaving it to the third party to do all the work. The head is not entitled to simply put the entire onus of review on the third party. Finally, the practical constraints on the head must be considered.

The head may not be well informed about the subject matter of the information and may therefore be disadvantaged in assessing it. The head is also bound by the time limits under the Act; one of the responsibilities of the head is to provide timely access to the record. 88 In my view, the head must conduct a sufficient review of the requested material in order to decide if the threshold for notice, as I have discussed it above, has been met. … [ 48 ] The obligation on the head is clear.

Fulfilling it will not be easy, and I read into Merck the admonition that, when in doubt on the issue of ‘reason to believe,’ the head should err on the side of caution and give notice. [ 49 ] Merck does not directly address one issue raised by this appeal; i.e. whether or not the obligation to review for potential exceptions extends to third parties (here, the retailers) identified in information provided by the ‘primary’ third party (here, ALC). [ 50 ] Based upon the approach to notice expressed in Merck , a remedial

interpretation of

section 19 in the context of the Act as a whole, the potential for harm from disclosure, and the Act ’s limitation on a civil remedy, I consider that the obligation of the head to disclose extends beyond the primary third party to any other party reasonably identifiable in the requested information. [ 51 ] The definition of third party is all encompassing and it would be contrary to the “protection from harm” purpose expressed in paragraph 3(2)(iii) to limit the identification of third parties to only the person that provided (here, ALC) or authored the information under review by the head.

[ 52 ] Thus, a head must take reasonable care to determine whether the requested information identifies other persons whose information is disclosed, either directly or by reasonable inference in the requested information. [ 53 ] In the present case, although I have not seen the requested information, it appears from the record that the retailers would be identified as potential third parties. [ 54 ] Having identified potential third parties in what I would call a liberal manner, it is then the responsibility of the head to assess whether there is reason to believe that the information of such parties is “of” a potential third party and, if so, if there is reason to believe the information might be excepted from disclosure.

This assessment would determine whether or not the low threshold for giving notice has been met. [ 55 ] I hasten to add that there is no evidence that an assessment of this nature was not done in this case. I offer these views on the consideration of notice issue because of the novelty of the issue and to respond to the submissions of counsel. conclusion [ 56 ] The appeal of ACL is dismissed. I am grateful to all counsel for their written submissions and their presentation of the appeal. Each party will bear its own costs. _____________________________ David B. Orsborn Justice