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In Richard Charles Fox-Davies v Burberry plc, in dismissing the appeal, the Court of Appeal held that a company did not have to comply with a request, under section 116 of the Companies Act 2006, to inspect or copy the company’s register of members made by a person who was not a member of the company and who ran an agency to trace lost members of public quoted companies. The Court of Appeal held that the request was invalid as it did not contain the names and addresses of any individuals with whom the tracing agent was going to share the information, as required by section 116(4)(d) of the Companies Act 2006.
The court also found that the request had been made for an improper purpose, although all three appeal judges differed in their reasoning. Broadly, two of the judges found that the tracing agent had not provided sufficient information about the terms on which the lost shareholders would be reconnected with the company to enable a proper assessment of the stated purpose to be made; and one judge found that the purpose was to extract a commission or fee from traced lost members, by not disclosing the asset to which they may be entitled before they agree to pay commission, and that this purpose was not proper.
The court did however agree that, for the purposes of section 117 of the Companies Act 2006, the onus is on the company to show that the purpose is improper; the test of whether a purpose is improper is objective, in that it is made by the court on the basis of its evaluation of the purpose; that in deciding whether a purpose is proper, it may be necessary to look at both the objective and the means of achieving that objective; that the test is the same for requests by members or non-members; and the test does not depend on whether the request is in the interests of the shareholders.
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