VCAT clarifies "commercial in confidence" exemption 

VCAT has handed down a decision about the correct test to apply when considering the “commercial in confidence” exemption.

VCAT has recently clarified what is a fine, but important, point in applying s 34(1)(b) of the Victorian FOI Act.

One of the requirements of s 34(1)(b) is whether “disclosure of the information would be likely to expose the undertaking unreasonably to disadvantage”.

Unfortunately, over the years there has crept into FOI jargon a summary term referring to the need for “unreasonable disadvantage”.  When you look at the section carefully, that is not what is says.  That shorthand expression of “unreasonable disadvantage” is not legally correct and has resulted in what might be considered as application by VCAT and the Information Commissioner of the wrong legal test.

We have consistently submitted that the correct approach is to, first, identify some disadvantage.  Only once that is done does it become necessary to consider whether disclosure would expose a third party business unreasonably to that disadvantage. 

The word “unreasonably” describes the exposure, not the level of disadvantage.

In Avalon Airport Australia Pty Ltd v Environment Protection Authority & Ferrier [2026] VCAT 95, the VCAT has correctly stated the test to be applied.  The Tribunal referred to our submissions about the correct test once disadvantage had been identified (at [48]):

“In determining the question as to whether the applicant would be exposed unreasonably to disadvantage as a result of the disclosure, the respondent stressed that it is the level of exposure that must be found to be unreasonable and not the level of disadvantage.”

Accepting the approach put forward on behalf of the EPA, the Tribunal concluded (at [97]):

“Even accepting that the release of the information contained in the disputed documents would result in disadvantage to the applicant, manifesting in an unfavourable position in relation to management of the commercial tenancies within Avalon Airport, Mr Moreland’s statement does not set out any basis for his conclusion that exposure to such disadvantage would, in all the circumstances, be unreasonable."

The Tribunal was not satisfied that the exposure to any disadvantage would be unreasonable.

We will now wait to see if other VCAT decisions adopt that correct approach in their analysis. Importantly, however, agencies should do so.