Case Summary and Outcome
The Supreme Court of Appeal of South Africa held that parties relying on harm to third party interests to justify a refusal to disclose information must show that the harm is “not simply possible, but probable”. The case was brought by SA Metal Machinery Company (Pty) Ltd., an unsuccessful bidder in a public tender, which sought documents related to the winning tender from the state owned Inter Waste (Pty) Ltd. under the Promotion of Access to Information Act (PAIA). Transnet Limited provided access but justified deleting certain details relying on exemptions for duty of confidence and harm due to exposure of trade secrets. The Court found that a confidentiality clause cannot protect a contract between a state company and a third party from disclosure after the contract had been awarded. The Court also affirmed that a requester need not show legitimate reasons for requesting information.
This analysis was contributed by Right2Info.org.
The appellant state-owned company, Transnet Limited, acting through its wholly-owned subsidiary, National Ports Authority of South Africa, invited tenders for a waste removal contract. SA Metal Machinery Company (Pty) Ltd., an unsuccessful bidder in the tender, sought documents related to the winning tender by Inter Waste (Pty) Ltd. under the Promotion of Access to 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).
The respondent, SA Metal Machinery, applied to the High Court at Cape Town which granted an order in the terms of the Act directing the appellant to disclose a completed schedule of Inter Waste’s tender as submitted to the appellant.
The Court held that 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”. 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.” The Court concluded that a harmful event “could reasonably be expected” if the event’s occurrence is probable, not merely possible. 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. The Court agreed with SA Metal Machinery that information about Inter Waste’s rates could not be broken down into its subcomponents and therefore could not be useful to competitors.
Section 37 prohibits disclosure if it would constitute grounds for an action for breach of a duty of confidence. The Court said that Transnet Limited had a constitutional obligation to conduct operations in a transparent and accountable manner and, therefore, the confidentiality clause could not protect disclosure of a bidder’s information after the contract had been awarded. It said: “Parties cannot circumvent the terms of [PAIA] by resorting to a confidentiality clause.”
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 under Section 82 of PAIA which gives a court power to make any order that is just and equitable. It argued that the Court should exercise its power to dismiss the request, asserting that 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.” “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.” Notably, it said, requesters need not show legitimate reasons for requesting the information; a requester’s reasons are not relevant.