31 May 2023
7 min read
#Dispute Resolution & Litigation
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A recent Supreme Court decision has confirmed that the right to inspect and obtain copies of the company register under the Corporations Act 2001 (Cth) (Act) includes access to members’ email addresses where nominated as a means of communication.
Melbourne Football Club Ltd (MFC Ltd), like other AFL clubs, is incorporated under the Act as a company limited by guarantee.
In May 2022, MFC Ltd announced its intention to review its constitution, which had not been substantially revised since 2006.
In response to MFC Ltd’s call for feedback from members regarding amendments to the constitution, Peter Lawrence, a MFC Ltd member, and his informal group called “Deemocracy” held informal meetings with the executive of MFC Ltd to propose amendments to the constitution.
In August 2022, MFC Ltd informed Mr Lawrence and Deemocracy that their proposed amendments would not be implemented. Subsequently, MFC Ltd announced that a special general meeting would be held on 26 October 2022 to consider the changes to the constitution.
Mr Lawrence then requested a copy of the register of MFC Ltd’s members, so as to communicate Deemocracy’s position, citing the following purpose:
“To write to the members of the MFC and provide them with a copy of [Deemocracy’s] draft Constitution (together with a summary and explanatory notes). This communication will highlight the differences between our draft of the Constitution and the Constitution that would emerge if the Club’s proposed amendments were approved. In this way the members will be more fully informed when they cast their vote at the Special General Meeting.”
On 1 October 2022, MFC Ltd provided Mr Lawrence with an Excel spreadsheet containing the names and postal addresses of 48,216 voting members. However, when Mr Lawrence requested the email addresses of voting members, MFC Ltd denied his request.
Mr Lawrence then commenced a proceeding in the Supreme Court of Victoria seeking declarative relief requiring the production of the register of MFC Ltd’s members containing their members’ email addresses.
All companies must set up and maintain a register of members. Under section 169(1) of the Act, the register must contain certain information about each member, including “the member’s name and address”.
Section 173(1) of the Act permits anyone has a right to inspect the register. Under section 173(3), a person can also obtain a copy of the register on application to the company, provided that application states the purpose for which the person is accessing the register and that purpose is not a prescribed improper purpose. These restrictions primarily aim to prevent activities like hawking and include the following:
The decisive issue in the proceeding, as framed by Riordan J, was whether, as a matter of ordinary statutory construction, the word “address” under section 169(1) of the Act includes email addresses nominated by members.
In Riordan J’s judgment (Judgment), his Honour held that the word “address” under section 169(1)(a) of the Act did include email addresses nominated by members in circumstances where members had elected to receive communications from MFC Ltd by email.
His Honour confirmed that, in view of the High Court’s longstanding emphasis on the primacy of the text of the provision from the Project Blue Sky line of authorities, the Court’s task in construing statute is to examine the text of a provision in its proper context and in light of its legislative purpose.
It was submitted on behalf of MFC Ltd that the word “address” in section 169(1)(a) of the Act must be limited to “postal address” as, amongst other things, looking to the broader statutory context, section 249J(3)(b) of the Act, in relation to the provision of notice of meetings to members and directors individually, “address” relates to a member’s postal address, and the Act does not elsewhere refer to an email address as a form of ‘address’.
However, in finding that the word “address” was capable of including email addresses, his Honour reasoned that:
This decision in this case is a timely one. It cuts across the major modern concerns of personal privacy, corporate governance, and the civil religion of AFL in Victoria.
At a fundamental level, as was submitted for Mr Lawrence, the decision affirms that the democratic right for members and shareholders of all companies to communicate freely and openly on matters concerning company affairs is essential to good corporate governance.
It would be a parody of democracy for Parliament to confer on members the democratic right to regulate the governance of a company, for instance by voting on amendments proposed by the board at a special general meeting, but to deny them the means to communicate with their fellow members in order to exercise that right.
The right to communicate to members by members’ preferred means should not to be restricted to the board. Neither should it be hamstrung, in modern times, by restricting the right to communicate to the increasingly costly and inconvenient means of post.
Understandably, members might harbour concerns about divulging members’ email addresses given recent high-profile incidents of data theft and corporate breaches of privacy.
However, his Honour noted that such concerns are properly addressed by denying the right to obtain copies of access to the register for an improper purpose.
For the purposes of a request under section 173, regulation 2C.1.05 of the Corporations Regulations 2001 (Cth) also enables companies to consider whether a person is seeking to use the information contained in the register for a purpose that would be contrary to law, or for one of the specified improper purposes.
Further, under sections 137.1 and 137.2 of the Criminal Code, being the schedule to the Criminal Code Act 1995 (Cth), providing false or misleading information in relation to such an application for access is an offence and there are prescribed penalties for unauthorised use.
His Honour also noted that there are arguably greater privacy concerns about the disclosure of postal addresses than email addresses, such as the risks of physical harm.
These concerns ought not to outweigh the importance of allowing members to communicate by their preferred means.
The decision in this case also expands established authority. In MDA National Limited v Medical Defence Australia Ltd [No 2] [2014] FCA 1071, Yates J held that a right to inspect the register of members conferred a right to inspect the whole of the register, which includes email addresses of members to the extent they are recorded on the register. In Lawrence, it was not necessary to determine whether or not MFC Ltd’s register, in the form it was kept by MFC Ltd, contained members’ email addresses.
The position now appears to be that the right to access the register under section 173 of the Act includes a right to access the address in the form nominated by a member as their preferred means of communication.
Holding Redlich acted for the plaintiff in the proceeding and has extensive experience in shareholder disputes and activism. If you have any questions about this case, please get in touch with a member of our team below.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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