Environment – Human rights – Public procurement

Veolia ES Nottinghamshire Ltd (appellant) v Nottinghamshire County Council (respondent) and (1) Shlomo Dowen (2) Audit Commission for Local Authorities and the National Health Service For England (interested parties): CA (Civ Div) (Lords Justices Rix, Etherton, Jackson): 9 October 2010

The appellant waste management company (V) appealed against a decision ([2009] EWHC 2382 (Admin), [2010] PTSR 797) that documents relating to the respondent local authority’s accounts were to be made available for inspection by the first interested party (D).

V had a contract with the local authority for waste management. The local authority had proposed to make certain documents available for inspection by D. V had asked the local authority not to disclose the documents on the ground of commercial confidentiality and brought proceedings to compel the local authority not to disclose them. V argued that: (1) to come within section 15(1) of the Audit Commission Act 1998, documents had to be referred to in the local authority’s income and expenditure account found in its statement of accounts, and any other interpretation of ‘accounts to be audited’ and ‘relating to’ would be unreasonably wide; (2) section 15(1) had to be read down in order to preserve the confidentiality of confidential information under common law and/or article 6 of the European Convention on Human Rights 1950 and/or Directive 2004/18; (3) the public inspection provisions of the 1998 act only permitted use of the disclosed information for the purposes of an audit under the act.

Held: (1) The phrase ‘accounts to be audited’ was to be given a wide meaning. The closest to a definition of the phrase was in section 2 of the 1998 act, which stated that the accounts to which that section applied should be audited in accordance with the act. Schedule 2 stated that section 2 applied to ‘all accounts’ of a local authority. The language of section 15(1) was very wide and there was no evidence that a wider right of inspection would open the floodgates. The words ‘relating to’ did not mean the same as ‘referring to’. Whether an accounting document related to a body’s accounts was established by the nature and function of the document as much as anything else. The judge had been right to reject the submission that a narrow reading of ‘relating to’ would better meet the purposes of the act. Even if ‘accounts to be audited’ were given a narrow meaning, the contract and its invoices would plainly be within the scope of documents ‘relating to’ such accounts. The judge’s decision in respect of V’s first ground would be upheld (see paragraphs 89-103 of judgment).

(2) There was no express abrogation in section 15(1) or elsewhere of the right to preserve confidential information. Section 49 of the 1998 act stated a general principle that neither the Audit Commission nor an auditor could disclose the still wider class of documents to which they had access save under an express provision of section 49. That showed that documents and information to which they had access did not, by reason of that access alone, lose the confidence to which the owner was entitled. It would be irrational if persons interested were, by reason of their right to access to a narrower class of documents, entitled to breach the confidence which resided in documents or information to which they might obtain access under section 15(1), R (on the application of Morgan Grenfell & Co Ltd) v Special Commissioners of Income Tax [2002] UKHL 21, [2003] 1 AC 563 applied (paragraph 112). Protocol 1 of article 1, and perhaps article 8, provided sufficient reason to read down section 15(1) so as to make an exception for confidential information, subject to the question of justification, and any protection provided by Directive 2004/18 would involve a balancing consideration similar to that which would arise under the convention (paragraphs 141-142).

(3) The third issue did not arise for decision. It was a difficult and important issue, on which the weight of existing authority was against any implied statutory restriction. The spelling out of such an implied statutory restriction was not clear or straightforward, bearing in mind that section 49 contained express restrictions on disclosure. Also, the meaning and effect of the suggested restriction was far from clear. The objects of the audit included, under section 5(1)(e), the very broad one of securing ‘economy, efficiency and effectiveness in the use of... resources’ by the body in question, and there were many ways in which an interested person who obtained information under section 15(1) might seek to deploy such information with that object in mind. It was unlikely to be helpful to consider the lawfulness of such conduct in the abstract by reference to a general implied formula rather than on the facts of a particular case in private law where a claimant sought to restrain the use of the information (paragraphs 163-165).

Judgment accordingly.

Philip Coppel QC (instructed by Reynolds Porter Chamberlain) for the appellant; Clive Lewis QC, Ian Rogers (instructed by in-house solicitor) for the respondent; Timothy Pitt-Payne QC (instructed by Friends of the Earth Rights and Justice Centre) for the first interested party; Peter Oldham QC (instructed by in-house solicitor) for the second interested party.