Sir Henry Royce Memorial Foundation v Hardy

A request to inspect or copy a company’s register of members must contain all information required by section 116 when made. A missing statement cannot be retrospectively supplied by a later communication unless that communication is construed as a fresh request. The court assesses whether the request has a proper purpose objectively and at the date of the request. Where several purposes are stated, access may be refused if any one is improper. Allegations concerning a person’s conduct in another company do not, without more, establish a proper purpose for seeking members’ details to remove that person as a director of the subject company. Suspicion of later misuse is insufficient; the court must be satisfied on the balance of probabilities, with section 119 providing sanctions for misuse.

The claimant, a company limited by guarantee and registered charity, sought an order under section 117 of the Companies Act 2006 preventing compliance with the defendant member’s request under section 116 to inspect and copy the register of members.

The request stated purposes including convening a members’ meeting, obtaining explanations and accounts, and seeking the removal of five directors. It omitted the required statement concerning disclosure of the information to other persons. The defendant supplied that statement by a later email. The issues were whether the original request was valid, whether the stated purposes were proper, and whether there was sufficient evidence of intended misuse.

1. Validity of the request. Section 116(4) imposed a mandatory requirement that the request contain the specified information. The request made on 10 February 2020 contained no statement about whether the information would be disclosed to another person and was therefore invalid. The later email expressed an intention to correct the omission rather than making a fresh request. The statutory language contemplated a single request, and separate communications could not be aggregated to cure the defect. The company needed to know its position when the request was made, particularly because section 117 allowed only five working days to apply to the court and section 118 imposed criminal sanctions. The claimant therefore succeeded on this ground.
2. Proper purpose. The court had to determine the purpose objectively, on the evidence, and assess its propriety at the date of the request. The claimant bore the burden on the balance of probabilities. A purpose of seeking an explanation for the delayed annual general meeting and access to accounts not yet distributed was proper. However, the purpose of obtaining members’ details to seek removal of directors was improper. The allegations concerned the individuals’ conduct as directors of another company, whose membership and corporate affairs were distinct. More was required to connect that alleged conduct with their directorships of the claimant. Since one of the purposes was improper, a no-access order would have been required.
3. Risk of misuse. A person’s history of litigation or dishonesty did not automatically establish an intention to misuse members’ information. The court could refuse access for an undeclared improper purpose only where satisfied, on the balance of probabilities, that misuse or disclosure to third parties was intended or would occur. Mere suspicion was insufficient. If the request had otherwise been valid and proper, section 119’s criminal offences would have supplied the relevant protection.
4. The claimant was entitled to the appropriate no-access order. A draft memorandum of order was to be submitted for approval.