Accessing shareholders' email addresses through the register

Articles Written by Justin Harris (Partner)

A recent decision of the Western Australian Supreme Court confirmed a company’s obligation to hand over shareholders’ email addresses when complying with its obligation to provide a copy of the members’ register.

One counterbalance to traditional governance is shareholder activism, by which one or more shareholders agitate for change. Activist shareholders will often seek to contact other shareholders in the ‘target’ company in the hope that they will side with the activist or otherwise amplify calls for change.

While, increasingly, this contact seeks to use traditional media or social media platforms (such as the campaign led by a former AFR columnist relating to TNG Limited) there is nothing quite like access to a company’s share register – with a view to direct access to those voting shareholders recorded in it.

The requirement for a company to maintain a register of members is set out in Part 2C.1 of the Corporations Act.  Relevantly, section 169 says that the register maintained by the company must contain the “member’s name and address”. Any person (whether or not they are an existing shareholder) has a right to access and get a copy of such a register under section 173 of the Act.  Where a copy is sought, the request must be made in accordance with the formalities in the Act (including setting out the purpose of seeking access) and must be accompanied by a prescribed fee. 

Australian legislation is (especially since the COVID restrictions) increasingly willing to permit the use of electronic communications. Shareholders can now elect to have companies send them communications in electronic form (section 110E of the Corporations Act). Recent amendments also now permit takeover documents (including bidder’s and target’s statements) to be sent by electronic means (see the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023).

Even so, there has remained a question about whether the copy of the register accessed under section 173 needs to include email addresses where these have been nominated by shareholders. In other words, are email addresses now caught by the reference in section 169 to a member’s “address”?

This was the key question recently considered by the WA Supreme Court in AVZ Minerals Ltd v Fat Tail Holdings [2023] WASC 403.

The background was that Fat Tail had nominated three nominees to the board of AVZ and wished to communicate directly with other AVZ shareholders in the lead up to the meeting at which the relevant resolutions were to be considered.

Fat Tail made a request under section 173 for a copy of the AVZ register and received an electronic (soft) copy which included physical addresses only – which was significant as some 28 per cent of AVZ shareholders had nominated email as their preferred means of communication. This effectively meant that AVZ had provided a subset of the information it held – on the basis that, in its view, the “address” requirements of the Act referred to physical addresses only.

Fat Tail sought clarity that, once a member had provided an email address for the purposes of receiving communications, the register maintained by the company must contain the electronic address so nominated.

Justice Howard, in following the recent Victorian Supreme Court decision of Lawrence v Melbourne Football Club Ltd [2022] VSC 658, effectively agreed with Fat Tail’s proposition.

In doing so, he agreed (among other things) that:

  • one of the statutory purposes of a company having to maintain a register was communication with members – and the principal purpose for a member nominating an address (including an electronic address) was to permit the receipt of communications relevant to the company’s affairs;
  • the fact that there is a requirement that a copy of the register be provided on request suggests that the person receiving the copy should, effectively, be in the same position vis-à-vis communications with members as the company itself; and
  • in certain provisions (including section 205D), the Act uses the term “usual residential address” – this terminology is not used in section 169 (regarding registers) which suggests that the term “address” should not have a similarly limited meaning.

Key takeaways for boards
These recent decisions (AVZ and Lawrence) support the view that where an email address has been given to the company and is recorded in the database maintained by the company’s share registry, then this information needs to be included in the copy of the register provided to any applicant under section 173. Boards should therefore be aware that activists are increasingly likely to seek, and have easier access to, electronic contact details for shareholders.

Direct email communication (such as that used by the Mathieson camp in the lead up to the recent Endeavour Group AGM) will become more common. Access does not, however, ensure success – the activists in AVZ were (like those in Endeavour) unsuccessful with the vote.

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