Aviva PLC v Litani LLC

Access to a company’s register of members may be refused only where the stated purpose is not proper. The court must identify the requester’s purpose and evaluate it objectively in context. Commercial profit does not, by itself, make a purpose improper. The court may refuse access where the proposed conduct is genuinely exploitative, commercially oppressive, wholly useless or intended to harass members. It should not choose between lawful commercial alternatives merely because one offers better terms. The assessment concerns the purpose and the proposed means of pursuing it, and is made at the date of the court’s decision.

Litani LLC, which was not an Aviva member, requested a copy of Aviva’s register of members under section 116 of the Companies Act 2006. It intended to make discounted offers to selected retail shareholders and resell acquired shares at a profit. Aviva applied under section 117, contending that the purpose was improper because the offer would disadvantage shareholders, provide an inferior alternative to existing dealing services, expose members’ data to an opaque third party and resemble mini-tender offers attracting regulatory concern in the United States.

The central issue was whether access was sought for a proper purpose, assessed at the date of the hearing.

Application dismissed. Aviva had not shown that Litani’s access to the register was sought for an improper purpose.

1. The court’s task under section 117 was mandatory once the facts and evaluation had been determined. It had first to identify Litani’s purpose and then decide objectively whether that purpose was not proper. The burden of establishing that conclusion lay on Aviva, although the requester had a prior obligation to state and particularise a proper purpose.
2. The statutory concept was concerned with purpose, not the character or reputation of the requester. A commercial purpose, including one intended to make a profit, was not inherently improper. The relevant inquiry could include the proposed means of achieving the purpose, especially where those means might be exploitative or commercially oppressive.
3. The court identified clear limits, including genuinely exploitative or unscrupulous conduct, complete inutility and harassment of members. The court should not regulate lawful commercial activity in granular fashion or substitute its own assessment of value for that of shareholders.
4. Litani’s offer related to shareholders in their capacity as Aviva members. It was not unlawful, misleading, coercive or inherently improper. Although it offered less than the value obtainable through Computershare or Aviva’s small shareholder service, shareholders could assess the offer, reject it, or withdraw during the cooling-off period. The availability of a better alternative did not make Litani’s purpose improper.
5. The assessment was made at the date of the decision, rather than necessarily at the date of the request, because section 117(3) used the present tense. The court nevertheless stated that the result would have been the same on either date. Concerns about Litani’s undisclosed ownership, associated entities and United States regulatory inquiries did not establish an improper purpose or justify treating Litani as an improper person.

Aviva’s application was dismissed.