Change in partnership

43.22 In certain circumstances, an act or practice is not an interference with the privacy of an individual if it consists of passing personal information from an old to a new partnership.^[39] The new partnership must: be formed at the same time or immediately after the old one; have at least one partner transferred from the old partnership; and carry on the same or a similar business as the old partnership.^[40] The exemption applies to the disclosure and collection of personal information between the old and new partnerships, but does not apply to the use and holding of the information.^[41]

43.23 The exemption does not apply if the acts and practices: breach the TFN guidelines, or involve an unauthorised requirement or request for disclosure of an individual’s TFN; breach Part 2 of the Data-matching Program (Assistance and Tax) Act or the data-matching guidelines made under that Act; constitute a breach of the guidelines under s 135AA of the National Health Act; or constitute a credit reporting infringement by a credit reporting agency or a credit provider.^[42]

43.24 The Revised Explanatory Memorandum to the Privacy Amendment (Private Sector) Bill gave the following example to illustrate the reason for the exemption:

For example, a law firm (a partnership) collects personal information from, and holds personal information about, its clients. If a partner leaves the partnership, and a new partner joins the firm, the first partnership has dissolved and a second partnership forms. The purpose of clause 13C is to prevent disclosure to the second partnership and collection by the second partnership from being an interference with privacy. The sub-clause is not intended to allow a partnership to reform and use the information collected for a totally different business purpose.^[43]

43.25 Stakeholders have not raised concerns in this Inquiry about the partial exemption for changes in partnership. The OPC stated that where there is a change in partnership that falls within the exemption,

as a matter of best practice … [the] new partnership should write to their customers and advise them of the change. In this way the individual concerned has a measure of choice over whether they wish to continue to transact with the new partnership and in this way have some control over their personal information that the partnership has collected.^[44]

ALRC’s view

43.26 Partnership law provides that, subject to the terms of the specific partnership agreement, an old partnership is dissolved and a new partnership is created whenever a partner joins or leaves a partnership.^[45] The exemption is a sensible approach to avoid an unnecessary burden on partnerships to obtain consent from individuals for the transfer of their personal information from the old partnership to the new one each time a partner joins or leave a partnership. It should be noted that, except for the transfer of personal information from the old partnership to the new, the partnership must continue to comply with the privacy principles in all other respects.

43.27 The ALRC agrees that, as a matter of best practice, it is desirable for a new partnership to write to their customers to advise them of the change. This does not need to be a formal statutory requirement.