Burberry Group plc v Fox-Davies [2017] EWCA Civ 1129

Mr Fox-Davies, operating a business tracing lost shareholders, requested a copy of Burberry's register of members to contact lost shareholders and charge commission for reconnecting them with their shares. The Court of Appeal upheld the refusal, finding the request failed to comply with statutory requirements and was not made for a proper purpose.

Facts

The appellant, Richard Fox-Davies, operated a business tracing lost members of companies and reuniting them with their shares for a commission. He requested a copy of Burberry PLC’s register of members under section 116 of the Companies Act 2006. His business model involved contacting traced shareholders without disclosing the nature of the asset until they agreed to pay his commission. Burberry had already appointed ProSearch Assets Solutions Limited to trace lost members on more favourable terms, offering shareholders the option to claim shares directly without charges.

The Appellant’s Business Model

The appellant would trace lost shareholders, notify them he had information leading to asset recovery, but would not disclose any details about the asset’s value, nature, or location until they agreed to pay commission. The commission rate was not published or disclosed in evidence.

Issues

1. Whether the appellant’s request complied with the requirements of section 116(4) of the Companies Act 2006, particularly regarding disclosure of persons to whom information would be provided.

2. Whether the appellant’s purpose in requesting the register was a ‘proper purpose’ within the meaning of section 117.

Judgment

Non-compliance with Section 116(4)(d)

Lord Justice David Richards held that the request failed to comply with section 116(4)(d) because it did not identify the names and addresses of the specialist researchers to whom information would be disclosed. He stated:

“While the requests stated that the information would be disclosed to Interum, they did not disclose that the appellant would disclose to the specialist researchers the names and addresses of those shareholders he wished them to trace, still less state the names and addresses of the researchers.”

Improper Purpose

On the question of proper purpose, David Richards LJ held that the appellant’s method of extracting commission before revealing information to shareholders was improper:

“The appellant’s request involves obtaining that personal information by the statutory machinery and then using it to his financial advantage through the expedient of not disclosing to those members the very information that he has obtained, namely that they hold shares in Burberry.”

Sir Patrick Elias’s Reasoning

Sir Patrick Elias agreed with the outcome but disagreed with certain aspects of the Registrar’s reasoning. He held that without information about commercial charges, the court could not properly determine whether the purpose was proper:

“Without information about the commercial charges – and none was provided to the court – a court could not properly determine whether or not the purpose was proper.”

Implications

This case provides important guidance on the interpretation of ‘proper purpose’ under section 117 of the Companies Act 2006. It establishes that:

• Compliance with section 116(4) is mandatory, and failure to provide required information invalidates the request
• The means by which a purpose is achieved may render an otherwise legitimate objective improper
• Commercial tracing agencies must disclose sufficient information about their terms to enable assessment of whether their purpose is proper
• The existence of another tracing agency on more favourable terms may be relevant to determining proper purpose

The case distinguishes between legitimate commercial tracing activities and ‘bounty hunters’ who may exploit shareholders unfairly.

Verdict: Appeal dismissed. The Court of Appeal upheld Registrar Briggs’s direction that Burberry was not required to comply with the appellant’s request for a copy of the register of members, on the grounds that the request did not comply with section 116(4)(d) and was not made for a proper purpose.

Source: Burberry Group plc v Fox-Davies [2017] EWCA Civ 1129