Sir Henry Royce Memorial Foundation v Hardy [2021] EWHC 714 (Ch)

A charity sought a court order to refuse a member's request for access to its register of members under section 116 of the Companies Act 2006. The member's request omitted required information about disclosure to third parties. The court held the request was invalid and, alternatively, that one stated purpose was improper.

Facts

The claimant, Sir Henry Royce Memorial Foundation, was a company limited by guarantee and registered charity. The defendant, Mark Gregory Hardy, became a member in November 2019. On 10 February 2020, the defendant made a request under section 116 of the Companies Act 2006 to inspect and copy the register of members, stating he wished to call a special meeting to: (1) explain why the 2019 AGM was delayed; (2) produce the audited accounts; and (3) remove five directors accused of misconduct as directors of a related company, the Rolls-Royce Enthusiasts Club.

Critically, the defendant’s request omitted the statement required by section 116(4)(d) regarding whether information would be disclosed to third parties. The defendant attempted to correct this omission by email on 13 February 2020, stating he had no intention of disclosing the information. The claimant applied to court under section 117 for an order that it need not comply with the request.

Issues

1. Validity of the Request

Whether the defendant’s request was valid under section 116 despite omitting the required statement about disclosure to third parties, and whether subsequent correction could validate it.

2. Proper Purpose

Whether the stated purposes for which the information was sought were ‘proper purposes’ within the meaning of section 117(3).

Judgment

Invalid Request

HHJ Paul Matthews held that the request was invalid. The court noted that section 116(4) requires the request to contain specified information, including under paragraph (d) whether information will be disclosed to others. Referring to Fox-Davies v Burberry plc [2017] EWCA Civ 1129, the judge stated:

“Section 116(4) is clear that the request ‘must contain’ the information specified in the sub-section… The statutory scheme strongly suggests that this is a mandatory requirement and that a company is not obliged to comply with a request that does not contain the necessary information.”

The court rejected the argument that subsequent correction could validate an invalid request, holding that a request is either valid or invalid at the time it is made, and its status should not change based on later events. The company needs certainty given the five-day deadline to challenge requests and potential criminal sanctions under section 118.

Proper Purpose Analysis

Although unnecessary given the invalidity finding, the court considered whether the purposes were proper. Applying Burry & Knight Ltd v Knight [2014] EWCA Civ 604, the court held that purposes (1) and (2) were proper at the time of the request, as the defendant had not yet received explanation for the delayed AGM or the accounts.

However, purpose (3) – removing directors for alleged misconduct as directors of the Club rather than the claimant – was improper:

“Here the claimant has satisfied me that there is nothing alleged against the five directors in their capacity as directors of the claimant which would justify the request for details of the members to call a meeting for the purpose of removing them from office as directors of the claimant. That is not a proper purpose.”

Following Arden LJ’s dictum that if any one purpose is improper, a no-access order must be made, the court would have refused access on this ground also.

Implications

This case reinforces the strict requirements for member requests under section 116 of the Companies Act 2006. Requests must contain all mandatory information at the time they are made; subsequent correction cannot validate an initially defective request. The decision also confirms that seeking to remove directors based solely on allegations of misconduct in their capacity as directors of a different company does not constitute a proper purpose for accessing a company’s register of members. The case provides useful guidance on the narrow circumstances in which companies can refuse member requests while balancing member rights against potential abuse.

Verdict: The claimant succeeded in its claim. The court made a no-access order directing the claimant not to comply with the defendant’s request, on the basis that the request was invalid for failing to contain required statutory information. Alternatively, the court held that at least one of the stated purposes was improper.

Source: Sir Henry Royce Memorial Foundation v Hardy [2021] EWHC 714 (Ch)