(1)Where a company receives a request under section 116 (register of members: right to inspect and require copy), it must within five working days either—
(a)comply with the request, or
(b)apply to the court.
(2)If it applies to the court it must notify the person making the request.
(3)If on an application under this section the court is satisfied that the inspection or copy is not sought for a proper purpose—
(a)it shall direct the company not to comply with the request, and
(b)it may further order that the company's costs (in Scotland, expenses) on the application be paid in whole or in part by the person who made the request, even if he is not a party to the application.
(4)If the court makes such a direction and it appears to the court that the company is or may be subject to other requests made for a similar purpose (whether made by the same person or different persons), it may direct that the company is not to comply with any such request.
The order must contain such provision as appears to the court appropriate to identify the requests to which it applies.
(5)If on an application under this section the court does not direct the company not to comply with the request, the company must comply with the request immediately upon the court giving its decision or, as the case may be, the proceedings being discontinued.
Cases considering section 117 (9)
[2020] EWCA Civ 980 · 29 July 2020Interprets
Interprets and applies the proper-purpose safeguard through an objective, evidence-based and fact-sensitive inquiry. (see paras [14], [16], [39])
Applies the burden on the company seeking a no-access direction; the application failed because the stated purpose was proper and no additional improper purpose was proved. (see paras [6], [16], [27])
Applies the power to direct a company not to comply where inspection is not sought for a proper purpose; no such direction was justified. (see paras [6], [14], [27], [41])
Applies the duty to comply immediately when no no-access direction is made; the first-instance direction to comply was upheld by dismissal of the appeal. (see paras [1], [14], [41])
[2017] EWCA Civ 1129 · 26 July 2017Interprets
The court interpreted the provision as requiring identification of the actual purpose followed by an objective evaluation of whether it is proper. The company bears the burden, and propriety depends on context and may include the proposed means of using the information (see paras [34]-[53]; [64]-[73]).
A company receiving a valid section 116 request must comply or apply to the court within five working days. An invalid request does not trigger that obligation (see paras [6]; [31]; [47]; [57]).
Where the court is satisfied that a copy or inspection is not sought for a proper purpose, it must direct the company not to comply. The direction made by the Registrar was upheld (see paras [21]; [53]; [80]-[81]).
The subsection was set out as permitting a direction covering other requests made for a similar purpose where the statutory conditions are met (see para [6]).
The subsection was set out as requiring immediate compliance if the court does not direct the company to refuse the request (see para [6]).
[2014] EWCA Civ 604 · 14 May 2014Limits
A company receiving a request must comply within five working days or apply to the court. Such an application should ordinarily be determined summarily because delay may defeat a proper purpose (see paras [10]; [113]; [117]).
The company must prove on the balance of probabilities that access is sought for an improper purpose. Any substantial improper purpose among several purposes requires a no-access direction, although terms may preserve communication for a proper purpose (see paras [17]–[29]; [82]–[93]).
A future-request order may extend only to requests having a purpose similar to the improper purpose already established. The order should identify that purpose clearly, preferably in a recital (see paras [30]; [78]–[80]).
Where the court is not satisfied that access is sought for an improper purpose, the requester retains the statutory right of access and the company must comply (see para [26]).
What each judgment says about section 117 is in the case-law panel in the full Act.
244.This is a new provision. This section provides a procedure by which the company can refer the matter to the court if it thinks that the request may not be for a proper purpose. It replaces the 10-day deadline for compliance with a request with a 5-day period within which the company must either comply with the request or apply to the court for relief from the obligation. If the company opts for the latter, then subsections (3), ( 4) and ( 5) apply. Under subsection (3), if the court is satisfied that the access to the register of members is not sought for a proper purpose, it will require the company of the obligation not to comply with the request and may require that the person who made the request pay the company’s costs. Under subsection (4), the court may also require the company not to comply with other requests made requests for similar purposes. If the court does not make an order under subsection (3), or the proceedings are discontinued, then, under subsection (5), the company must immediately comply with the request.