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Transnet Ltd. and Another v. SA Metal Machinery Co (PTY) Ltd.

last modified Aug 22, 2012 08:58 AM

Case number:
147/05
Country:
South Africa
Date of decision:
29 November 2005
Court / Arbiter:
Supreme Court of Appeal, unreviewable (unless constitutional matter) ( Supreme )


Decision:

Parties relying on harm to third party interests to justify refusals must show that these harms are "not simply possible, but probable". A confidentiality clause cannot shield a contract of a state company with a third party from disclosure. Requesters need not show legitimate reasons for requesting information.


Keywords:
Commercial confidentiality (including financial/economic interests of private parties or public authorities)
Constitution
Contracts / Agreements (use of public funds, negotiations)
Economic information (including of public authorities, national government; not of individuals)
Harm (including harm to legitimate interest, harm test)
Private entities (including entities that perform public functions or receive public funds, entities that manage privatized assets, state owned enterprises)
RTI law
Third parties
Trade secrets (including patents, copyrights)

Case details:

Facts

Transnet Limited, a state owned company, acting through its wholly-owned company National Ports Authority of South Africa invited tenders for a waste removal contract.  SA Metal Machinery, an unsuccessful bidder in the tender, sought documents related to the winning tender under the Promotion of Access of Information Act (PAIA). Transnet Limited provided access but deleted details related to the calculation of the tender price (i.e. the rates), relying on trade secrets (Sections 36) and duty of confidence (Section 37) (para. 15).

Decision

Section 32(1) of the Constitution confers upon every person the right to access any information held by the state - Transnet Limited was considered “the state” under this provision since it was “exercising […] public power” and “performing […] public function” (para. 8).   Further, access must be provided unless it can be refused under one of the exemptions provided by PAIA.

Section 36(1)(c) prohibits providing access to a third party trade secret or information that “would be likely to cause harm to the third party’s commercial or financial interest.” (para. 18). The Court concluded that a harmful event “could reasonably be expected” if the event’s occurrence is probable, not merely possible (para. 41).  In this case, Transnet Limited argued against disclosure because knowledge of the rates would give competitors insight into the winning bidder’s research and analysis. (paras. 45-46).  . (paras. 47-48). The Court agreed with SA Metal Machinery that rate information could not be broken down into its subcomponents and thus could not be useful to competitors. (paras. 47-50).

Section 37 prohibits disclosure if it would constitute grounds for an action for breach of a duty of confidence (para. 19). The Court explained that Transnet Limited is obligated to conduct operations in a transparent and accountable manner. Thus, the confidentiality clause could not protect disclosure of bidder’s information after the contract had been awarded.  The Court emphasized that “Parties cannot circumvent the terms of [PAIA] by resorting to a confidentiality clause.” (paras. 54-56).

Section 82 gives a court power to make any order that is just and equitable. (para. 22).  Transnet Limited argued that, despite its failure to establish a case for non-disclosure under Sections 36 and 37, it was entitled to a discretionary order dismissing the request, partly because SA Metal Machinery had failed to state “adequate legitimate reasons for wanting to know the rates.” (para. 58). The Court found this argument to be untenable, explaining that Section 82 is “intended to enable the court to tailor relief to which a successful applicant is entitled.” (para. 58).  “If the public body fails under those sections to justify its refusal of access[,] there can no longer be anything in the way of the requester’s right to access.”  (para. 58).  Notably, requesters need not show legitimate reasons for requesting the information; a requester’s reasons are not relevant  (para. 59).

Resources:

Judgment of the Court.