Fox-Davies v Burberry Plc

A request for a company’s register of members must contain the information required by section 116(4) of the Companies Act 2006. A requester proposing to disclose information to third-party researchers must identify them, even where each researcher will receive only part of the information.

On a section 117 application, the company must prove the requester’s purpose and its impropriety. The court finds the purpose as a fact and then evaluates it objectively. The manner in which a purpose will be pursued may make an otherwise legitimate purpose improper. A tracing agent who withholds the nature and value of an asset until a shareholder accepts undisclosed commission terms cannot establish a proper purpose without supplying sufficient information about those terms.

The appellant operated a commercial business tracing people entitled to unclaimed assets. He requested a copy of Burberry Plc’s register of members under section 116 of the Companies Act 2006, intending to use third-party researchers to locate lost shareholders. He would disclose information about an asset only after a shareholder agreed to pay an undisclosed commission.

Burberry refused the request and applied under section 117. Registrar Briggs found that the request failed to identify all intended recipients and that the register was not sought for a proper purpose. He directed Burberry not to comply.

The appeal concerned whether non-compliance with section 116(4)(d) invalidated the request and whether the proposed commercial use of the register was a proper purpose.

1. Appeal dismissed. The request was invalid because it failed to comply with section 116(4)(d) of the Companies Act 2006. The proposed disclosure to independent researchers had to be stated, with their names and addresses. The requirement applies when only part of the register’s information may be disclosed and to persons who may, rather than certainly will, receive it. A general statement that Interum might share information with others did not amount to substantial compliance.

2. Section 116(4) imposes mandatory requirements. Section 117 obliges a company to respond only to a request made under section 116. A wholesale failure to supply information required by paragraph (d) therefore prevents the statutory obligation to comply or apply to the court from arising.

3. On a section 117 application, the company bears the burden of satisfying the court that the request is not made for a proper purpose. The inquiry has two stages. The court first determines the actual purpose as a fact on the balance of probabilities and may look beyond the purpose stated in the request. It then makes an objective evaluative judgment about whether that purpose is proper, having regard to the circumstances.

4. A purpose need not invariably advance shareholders’ interests. The Act applies the same proper-purpose test to members and non-members. Commercial gain is not by itself improper. The court must nevertheless consider both the requester’s objective and the means by which it will be achieved, because commercially oppressive or exploitative terms may make an otherwise legitimate tracing purpose improper.

5. The appellant intended to obtain shareholders’ personal information through the statutory machinery, but to withhold the identity and value of their assets until they accepted his commission terms. Those terms and commission rates were not disclosed, even to the court. David Richards LJ regarded that method as an improper use of the register. Sir Patrick Elias considered the absence of information about the commercial charges decisive because it left a real risk of exploitation. Longmore LJ agreed that the purpose was improper on the facts, particularly because the full terms were not disclosed.

6. The order directing Burberry not to comply with the request was upheld.

1. Court of Appeal (Civil Division): The appeal was dismissed and Registrar Briggs’s direction that Burberry need not comply with the request was upheld: [2017] EWCA Civ 1129.
2. High Court, Chancery Division, Companies Court: Registrar Briggs held that the requests did not comply with section 116 of the Companies Act 2006 and were not made for a proper purpose. He directed Burberry not to comply. No citation is stated in the judgment.