Charlie Newington-Bridges successful in the High Court acting for the Sir Henry Royce Memorial Foundation in a s117 Companies Act claim

6th April 2021

Charlie Newington-Bridges was instructed by Willans LLP to act for the Sir Henry Royce Memorial Foundation (‘the Foundation’) in an application brought by the Foundation against one of its members who had made a request for a list of the names and addresses of the members of the Foundation under s116 of the Companies Act 2006. The defendant had sought the list, amongst other things in order to seek the removal of directors of the Foundation on grounds of gross negligence and other serious allegations. The Foundation refused the request and made this application under s117 to the Court on, in essence, two grounds: firstly, that the request was invalid because it did not contain all the information required under s116; and secondly, that the request was made for improper purposes.

Following a trial of the matter, in a detailed judgment HHJ Matthews reviewed the facts of the case and the relatively few authorities on these sections of the Companies Act 2006. The facts were complex because the defendant had sought to rely on over 500 pages of transcript of meetings as well as other evidence in making a number of serious allegations against the directors of the Foundation. The Judge found for the Foundation on both bases.

He held that the request was invalid because it failed to include the requisite information in the original request, and this failure was not remedied by later recognising the mistake and attempting to provide the information. The Judge also found for the Foundation on the basis that the request was for an improper purpose because the accusations against the directors of the Foundation were made in relation to their roles at a separate company, regardless of whether or not they had any merit. HHJ Matthews found that two other purposes, i.e. to request an explanation for the lateness of the AGM and lateness in the provision of annual accounts, were proper purposes. However, applying the dictum of Arden LJ in Burry & Knight Ltd v Knight [2014] EWCA Civ 604, he held that where one of the stated purposes of the request is improper the court is obliged to make a no-access provision, i.e. to find that the Company is entitled to refuse the request for the list of members.

The case is important because it provides a rare examination of the authorities and principles that apply in determining whether or not a Company should comply with a request by one of its members for the details of all the other members. It highlights the need to be precise in providing the information required in a s116 request, and gives some illustration of what the court may and may not consider to be proper purposes under s117 of the Companies Act 2006.

Charlie was instructed by Paul Gordon, partner and head of the litigation and dispute resolution team at Willans LLP. Our Commercial team, has significant experience of dealing with Companies Act 2006 matters such as this and would welcome the opportunity to discuss such disputes with clients.

The case is reported at Sir Henry Royce Memorial Foundation v Hardy [2021] EWHC 714 (Ch) and a copy of the judgment can be found here.