Fox-Davies v Burberry plc

The Court of Appeal dismissed the appellant's challenge to Registrar Briggs' direction under section 117 of the Companies Act 2006 that Burberry need not comply with a request for a copy of its register of members. The court upheld the Registrar's conclusion that the original request failed to comply with the mandatory requirements of section 116(4)(d) because it did not identify all persons to whom information would be disclosed. The court also upheld the Registrar's finding that, on the evidence, the appellant's purpose was commercial (to extract a commission) and that the manner in which he proposed to use the register (withholding the company identity until payment terms were agreed and providing no full disclosure of commercial terms) rendered the purpose not a proper purpose under section 117. The court recognised that the assessment of "proper purpose" is an objective evaluative judgment made on the facts, that means can be relevant to the assessment of ends, and that a requester must provide sufficient information about commercial terms where those terms are material to whether the request is proper.

Background and parties:

• The appellant operates an asset-tracing business recovering lost shareholdings and sought a full copy of Burberry PLC's register of members under section 116 of the Companies Act 2006. Burberry refused and applied under section 117 for a direction not to comply.
• The Registrar (Briggs) directed Burberry not to comply. The appellant appealed to the Court of Appeal.

Nature of the application:

The appellant sought a full copy of Burberry's register to trace lost members and recover entitlements, proposing to use an associated company and third-party local researchers and to charge a commission to recovered shareholders.

Issues framed:

1. Whether the requests complied with the mandatory contents requirements of section 116(4), in particular sub‑paragraph (d) identifying persons to whom the information would be disclosed.
2. Whether the appellant's stated and real purpose in requesting the register was a "proper purpose" within the meaning of section 117.

Court's reasoning and findings:

• The court held that section 116(4) is mandatory and the Registrar was correct to find that the requests were invalid for failing to identify all third parties to whom information would be disclosed (the local researchers), because the requirement applies equally where only part of the register is to be disclosed.
• On the proper purpose point the court explained that the fact-finding role identifies the requester’s purpose and the court then makes an objective evaluative judgment whether that purpose is proper. The court accepted that commercial motives are not automatically improper but found on the evidence the appellant's primary purpose was to extract a commission and that his method—refusing to disclose the company identity or commercial terms before a shareholder agreed to pay—meant the purpose was not proper in the circumstances. The court also emphasised that where commercial terms are material to the assessment, the requester must disclose them so the company and court can assess whether shareholders will be exploited.

Procedural posture: Appeal from the High Court (Companies Court, Registrar Briggs; case no. 3433 of 2013). Permission to appeal was granted by the Registrar.

The appeal was dismissed. The Court of Appeal held that (1) the request failed to comply with section 116(4)(d) because it did not identify all persons to whom register information would be disclosed; and (2) on the evidence the appellant's purpose was commercial (to extract a commission) and, given the manner in which he proposed to use the information and his failure to disclose the commercial terms, the purpose was not a proper purpose under section 117, justifying the Registrar's direction that Burberry need not comply with the request.

Appeal from the High Court of Justice, Chancery Division, Companies Court (Registrar Briggs) (Royal Courts of Justice), case no. 3433 of 2013; permission to appeal granted by the Registrar; Court of Appeal determination reported at [2017] EWCA Civ 1129.