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Document
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PO-2294
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File #
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PA-030285-1
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Institution/HIC
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Ontario Securities Commission
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Summary
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NATURE OF THE APPEAL: The Ministry of Finance (the Ministry) received three identical requests on behalf of the Ontario Securities Commissioner (the OSC) under the Freedom of Information and Protection of Privacy Act (the Act ) from a lawyer representing three different clients. Each request was for the Regulatory Escrow Trust Agreement and trust statements relating to the purchase of certain assets belonging to three named companies by another company in 1999. The OSC is a scheduled institution under the Act , but the Ministry’s Freedom of Information Coordinator handles requests on behalf of the OSC, and all correspondence concerning this request and appeal was channeled through the Ministry. The proper institution in this matter is the OSC, and I will refer to it rather than the Ministry throughout this order. Pursuant to section 28 of the Act , the OSC identified seven parties that might have an interest in the records (the affected parties), and sought their views regarding disclosure. Some affected parties objected, while others did not respond. After considering the affected parties’ submissions, the OSC informed the three requesters and the various affected parties that it had decided to grant partial access to Record 1 and to deny access to the rest of Record 1 and all of Records 2 and 3 on the basis of the exemptions in sections 17(1) (third party information) and 21 (invasion of privacy) of the Act . All three requesters appealed the OSC’s decision, and those appeals are the subject of a separate order. One affected party (now the appellant) also appealed the OSC’s decision to grant access to the identified portions of Record 1. That appeal is the subject of this order. Mediation was not successful and the appeal was transferred to the adjudication stage of the appeal process. I began my inquiry by sending the appellant a Notice of Inquiry setting out the issues on appeal and seeking written submissions. I received representations in response from counsel on behalf of the appellant. Counsel explained that the appellant is actually three separate corporate entities. However, because the representations are submitted on behalf of all three entities, I will treat them as one party for the purpose of this order. I then sent the Notice of Inquiry to the OSC and the three original requesters, together with a copy of the non-confidential portions of the appellant’s representations. The OSC responded by relying upon the representations submitted in the context of the appeals involving the three requesters. Counsel representing all three requesters responded with representations. RECORDS: Because the OSC denied access to Records 2 and 3 in their entirety, only Record 1 is at issue in this appeal. Record 1 is a 41-page Regulatory Escrow Trust Agreement, with 10 pages of attached schedules, that addresses how the proceeds of the sale of the corporate assets will be held in escrow and how the funds will be administered. The OSC has agreed to disclose most of the body of the agreement itself, withholding portions of 15 pages. Most of the attached schedules have been withheld in full. They are headed: Schedule A - Principal Shareholders (1 page) Schedule B - Approved Claims (6 pages) Schedule C - Receivables (1 page) Schedule D - Trustee Fee Schedule (2 pages) DISCUSSION: THIRD PARTY INFORMATION General principles Section 17(1) states, in part: A head shall refuse to disclose a record that reveals a trade secret or scientific, technical, commercial, financial or labour relations information, supplied in confidence implicitly or explicitly, where the disclosure could reasonably be expected to, (a) prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization; (b) result in similar information no longer being supplied to the institution where it is in the public interest that similar information continue to be so supplied; (c) result in undue loss or gain to any person, group, committee or financial institution or agency; Section 17(1) is designed to protect the confidential “informational assets” of businesses or other organizations that provide information to government institutions. Although one of the central purposes of the Act is to shed light on the operations of government, section 17(1) serves to limit disclosure of confidential information of third parties that could be exploited by a competitor in the marketplace [Orders PO-1805, PO-2018, PO-2184, MO- 1706]. For section 17(1) to apply, the parties resisting disclosure (in this case the appellant) must satisfy each part of the following three-part test: the record must reveal information that is a trade secret or scientific, technical, commercial, financial or labour relations information; and the information must have been supplied to the OSC in confidence, either implicitly or explicitly; and the prospect of disclosure of the record must give rise to a reasonable expectation that one of the harms specified in paragraph (a), (b) and/or (c) of section 17(1) will occur. [Orders 36, P-373, M-29 and M-37] Part 1: type of information Representations of the Parties The appellant submits generally that all of the information contained in the records at issue can be characterized as commercial and financial information: [Record 1] contains detailed financial and commercial information about the asset purchase, including such information as the amount of money paid for the assets and the other consideration (shares) being transferred as part of the transaction. [Record 1] details the creation of certain Trusts, comprised of funds and shares delivered in exchange for the assets purchased, and the purpose of the Trusts. [Record 1] also details how litigation and other claims made against [the corporate affected party] are to be handled, defended and settled, and provides details of how many claims are outstanding and [the appellant’s] assessment of those claims, including their likely settlement amount. It also addresses how the trust funds are to be administered. All of these things obviously constitute commercial and financial information. [Record] 1 addresses the issue of operating budgets, approval of claims, the amount of claims, possible settlement amounts, permitted investments, potential payees, the definition of trust property, and the termination date for the Escrow in the definition section. All of which clearly fall within the definition of commercial and financial information as they relate to how the fund is to be administered, paid out and in what manner. The appellant also makes submissions relating to specific portions of Record 1 that the OSC intends to disclose: Article 3 - ...describes how claims are to be handled, who is handling the claims and how the claims are to be negotiated. Article 4 - ... provides information about [the appellant’s] assets and how trust assets are to be used. ... Article 5 - ...is information relating to money to be paid from the trust and the basis for the payment. Article 6 - ... the disclosure of representations, war
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Legislation
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FIPPA
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17(1)(a), (b) & (c)
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Subject Index
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Signed by
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Tom Mitchinson
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Published
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Jun 16, 2004
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Type
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Order
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