The Corporations Act 2001 (Cth) (Act) regulates the content, inspection and use of information in registers of shareholders required to be maintained by companies. The Supreme Court of Western Australia recently considered these provisions and for what purposes a shareholder may use a company’s register in Re Bullseye Mining Ltd [2020] WASC 276.

Unsurprisingly, the Bullseye decision confirms that shareholders may use a company’s register to communicate with other shareholders about the performance of a company and its directors.

The Corporations Act requirements

Section 168 of the Act requires companies to maintain a register of shareholders which, under section 169, must include certain information such as the shareholders’ name, address, number of shares held and when they first became a shareholder. The Act provides any person the right:

  • to inspect a copy of the register: section 173(1); and
  • to request a copy of the register in a searchable, spreadsheet format (such as Microsoft Excel) within 7 days: section 173(3) and regulation 2C.1.02(a) of the Corporations Regulations 2001 (Cth).

Section 177 of the Act prohibits the use of information in the register to contact or send material to shareholders, unless the use of the information is “relevant to the holding of the interests recorded in the register or the exercise of rights attaching to them” or the company approves the use.

The Bullseye decision

Bullseye Mining Ltd is an unlisted public company that carries on gold exploration activities. On 16 June 2020, a shareholder of Bullseye requested a copy of its register. Bullseye initially refused to provide a copy. Bullseye eventually provided its register but failed to comply with the timing, information and formatting requirements of the Act.

The shareholder applied to the Supreme Court of WA for an injunction to compel Bullseye to provide a compliant register. Bullseye resisted the application, including on the basis that it was not required to provide its register where the shareholder’s proposed use of the register – to contact other shareholders about the conduct of the company’s affairs – was a prohibited use.

The Honourable Justice Hill ordered Bullseye to provide a copy of its register to the shareholder. Her Honour held that:

“… communicating with shareholders in respect of the performance of the company and its directors, and an invitation to communicate with the plaintiff to discuss any concerns, is connected to the holding of the shares as well as, potentially, with the exercise of rights attached to those shares.”

Her Honour also rejected Bullseye’s other defences to the application and awarded costs against the company.

The implications of the Bullseye Decision

With respect to proprietary companies, basic shareholder information is available by ASIC search. Shareholder information of public companies, however, is not available through searches of ASIC records. The register of members can be an important tool for shareholders wishing to ascertain, for example, their proportionate shareholding or the identities of their fellow shareholders.

Registers are commonly obtained in order to identify and communicate with shareholders in the context of board spill attempts and takeover bids. Some companies make seek to frustrate board spill attempts and takeover bids, and refusing or delaying the provision of a compliant register is one tactic that is used.

The Bullseye decision makes plain that shareholders have a right to communicate with each other about the company’s affairs, and may use the company’s register to do so. Any company that considers using its control over its register must now think again or face the prospect of a Court injunction to compel production of a compliant register.

Separately, public companies typically engage a professional share registry provider or accountants to maintain their registers. The Bullseye decision also confirms that any person or entity who maintains the register of members on behalf of a company cannot rely on a direction from the company or its directors to refuse to make the register available for inspection and provide copies if requested.