Burberry Group Plc v Fox-Davies

A request by a non-member to inspect or copy a company’s register of members must comply strictly with the mandatory information requirements in Companies Act 2006, section 116(4). Failure to identify persons with whom the information will be shared invalidates the request, so the statutory time for a company’s court application does not begin.

Whether the request is for a proper purpose under section 117 is an objective, fact-sensitive inquiry. The court considers the requester’s real purpose, intended use and dissemination of the information, shareholder protection, corporate transparency and the company’s circumstances. A commercial asset-tracing purpose is not automatically improper, but may be improper where it exposes shareholders to commercial exploitation and inadequate safeguards.

Burberry Group plc applied under section 117(3) of the Companies Act 2006 after Richard Fox-Davies, who was not a member, requested a copy of its register of members under section 116. He stated that the information would help shareholders recover unclaimed entitlements, but intended to pass information to Interum and specialist researchers operating through his commercial tracing business.

The company contended that the March request was invalid because it did not identify all persons who would receive the information, and that both requests pursued an improper commercial purpose. The central issues were whether the March letter was a valid request and whether the requested inspection or copying was sought for a proper purpose.

1. Validity of the request. Section 116(4) uses mandatory language. A requester who will disclose information to other individuals must provide their names and addresses. The March letter stated that Interum would receive the information but inaccurately denied that it would be shared directly with individuals. The evidence showed that information from the register would be disseminated to unidentified researchers. The March request was therefore invalid, and the strict five-working-day period in section 117(1) did not begin.
2. The court rejected an overly technical approach in the abstract, but held that commercial certainty required requests to be construed consistently with the statutory language. The requester’s status as a litigant in person did not relax section 116’s requirements. The April request was treated by agreement as valid for determining proper purpose, although it failed for the same substantive reason.
3. Proper purpose. The expression “proper purpose” bears its ordinary meaning, but the statutory inquiry is fact-sensitive and objective. The court must identify both the stated and real purposes, and may consider how the intended purpose will be carried out. The strong presumption favouring shareholder democracy in a member’s request does not apply in the same way to an outsider. The focus instead includes protection of shareholders as a class.
4. The court found that the real purpose was to obtain commission or fees from traced shareholders. Asset tracing for commercial gain is not automatically prohibited. The relevant guidance was qualified and did not impose a blanket ban. Here, however, the competing terms offered by different agencies, the requester’s onerous fee arrangements, his location outside the jurisdiction, the unknown external researchers and inadequate evidence of confidentiality meant that the activity was not in shareholders’ interests. Section 119 did not provide sufficient practical protection where information might reach unknown persons or organisations in foreign jurisdictions.
5. The court was satisfied on the balance of probabilities that the request was not for a proper purpose and directed the company not to comply under section 117(3). Costs were reserved.