Decision

Decision on Amaani London Limited

Published 6 August 2018

Order under the Companies Act 2006

In the matter of application No. 1376.

For a change of company name of registration No. 10108476.

Background, Claims and Defences

1. Mr Simon Dhillon claims that Amaani Limited is a name associated with him. He claims that there is goodwill and reputation attached to the name of this company which trades in hand embroidered fabrics.

2. Mr Dhillon claims to have been trading under Amaani since 2010. Initially he traded as a sole trader. Later, in June 2013, he incorporated a company called Amaani London Limited (company No.8562669) through which he continued to trade. According to Mr Dhillon, some “accounting difficulties” led to that company being struck of the register and dissolved on 20 January 2015. Mr Dhillon incorporated Amaani Limited (company number 9402925) three days later, on 23 January 2015. Mr Dhillon is the sole director and shareholder. He claims to have continued the fabric business through his new company.

3. Mr Dhillon claims that although they had met in the past, he became re-acquainted with Mr Deepinder Bains in December 2014 when they shared a flight from Birmingham to Gibraltar. Thereafter the two men became friends and made business trips together to Morocco, where Amaani Limited has a retail outlet. However, in or around September 2015, they started to fall out and by March 2016 their relationship had broken down. Mr Dhillon accuses Mr Bains of hacking his Facebook account (through which he conducts business) and stealing his goods and his clients.

4. In September 2016, Mr Dhillon applied to register a new company with the name Amaani London Limited. However, his application was rejected because a company with this name already existed under company number 10108476 (“the primary respondent”). He subsequently found out that Mr Bains had incorporated the primary respondent on 7 April 2016.

5. Mr Dhillon objects to the registration of the primary respondent because

…this is causing total confusion in the market and Mr Bains is pretending to be me and my company name is getting tarnished by his behaviour. He is misleading clients in the market constantly and has a history of copyright abuse.

6. Mr Dhillon asks us to remove the name Amaani London Limited from Mr Bains.

7. When making his application, Mr Dhillon requested that Mr Bains be joined to these proceedings as a co-respondent. An order has been made to that effect.

8. For his part, Mr Bains accepts that he was once an aide and a friend to Mr Dhillon. He says that he used skills developed during his career as a Senior Project Manager with the Royal Mail to assist Mr Dhillon with his venture. He claims that the ‘Amaani Ltd’ Facebook page was initially opened with his email address and telephone number. However, he denies stealing money from Mr Dhillon or impersonating him to take his clients.

9. Mr Bains claims that prior to the incorporation of the primary respondent, he reached an agreement with Mr Raj Chaouhan, the owner of Amaani Couture Ltd in India, which has supplied fabrics to both parties. They agreed that the Indian company would supply fabrics to him. Mr Bains says that he decided to call the primary respondent Amaani London Limited because it would be selling goods made by Amaani Couture Limited.

10. In addition, Mr Bains claims that:

• Amaani is a common name of Asian/Arabic origin;
• the word ‘Amaani’ has been used by several companies, both dissolved and current;
• [His] Amaani London imited set up an Instagram account, a Facebook page and a website and within 6 months generated a “significant” amount of business from the Facebook page;
• the primary respondent’s clients are being served by Mr Bains, not the applicant;
• the name Amaani London Limited was adopted in good faith

11. Mr Bains denies that:

• the applicant has goodwill associated with the name Amaani Limited;
• the name of the primary respondent is confusing or in any way misleading; • the applicant’s interests are not adversely affected to any significant extent

12. Both sides seek an award of costs.

Representation

13. The applicant is represented by Freeths LLP. The respondents are represented by Nelsons, solicitors. Neither side asked to be heard. Consequently, we have made this decision on the written evidence and arguments presented to us.

The evidence

14. The applicant’s evidence consists of two witness statements by Simon Dhillon with 28 exhibits. The respondent’s evidence consists of a witness statement by Deepinder Bains with one exhibit. We have read all the evidence.

The relevant law

15. Section 69 of the Companies Act 2006 (“the Act”) states:

“(1) A person (“the applicant”) may object to a company’s registered name on the ground

(a) that it is the same as a name associated with the applicant in which he has goodwill, or

(b) that it is sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

(2) The objection must be made by application to a company names adjudicator (see section 70).

(3) The company concerned shall be the primary respondent to the application. Any of its members may be joined as respondents.

(4) If the ground specified in subsection (1)(a) or (b) is established, it is for the respondents to show—

(a) that the name was registered before the commencement of the activities on which the applicant relies to show goodwill; or

(b) that the company -

(i) is operating under the name, or

(ii) is proposing to do so and has incurred substantial start-up costs in preparation, or

(iii) was formerly operating under the name and is now dormant; or

(c) that the name was registered in the ordinary course of a company formation business and the company is available for sale to the applicant on the standard terms of that business; or

(d) that the name was adopted in good faith; or

(e) that the interests of the applicant are not adversely affected to any significant extent.

If none of those is shown, the objection shall be upheld.

(5) If the facts mentioned in subsection (4)(a), (b) or (c) are established, the objection shall nevertheless be upheld if the applicant shows that the main purpose of the respondents (or any of them) in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name.

(6) If the objection is not upheld under subsection (4) or (5), it shall be dismissed.

(7) In this section “goodwill” includes reputation of any description.”

The applicant’s goodwill and reputation

16. The requirement in s.69(1) of the Act is that the primary respondent’s name “..is the same as a name associated with the applicant in which he has goodwill.” Mr Dhillon’s evidence is that he traded under Amaani as a sole trader prior to 2013, at which point the same business was continued by Amaani London Limited (company No.8562669). In these circumstances it will usually be inferred that any goodwill that existed was transferred to the company along with the business previously conducted by the sole trader. Amaani London Limited was dissolved in January 2015. According to Mr Dhillon, the goodwill associated with the company belonged to him. However, it is clear from the evidence that the company was trading under its own name and had its own bank account.^{[footnote 1]} And, as the respondents point out, s.1012 of the Act states the assets of a dissolved company become bona vacantia and therefore the property of the Crown.

17. This means that the applicant cannot claim the benefit of any goodwill owned by Amaani London Limited (company No.8562669). We therefore find it unnecessary to examine in detail the applicant’s claim to own a relevant goodwill resulting from the business conducted by that company.

18. Mr Dhillon’s business is based on a trade in hand-made bridal dresses. Up until 2015 these dresses were sourced in India. Since then some of them appear to have been sourced in the UK.^{[footnote 2]} Mr Dhillon says that many of the customers for these dresses are bridal outlets and beauticians who purchase the dresses and then rent them out to their customers as part of a bridal service. It is common ground that due to the style of the dresses they naturally appeal more to people of Arabic background. Consistent with this, the applicant’s only retail outlet is located in Tangiers, Morocco. Further, Amaani Limited’s Facebook page is predominantly in French.^{[footnote 3]} Similarly, the only recognition of the Amaani name in evidence is in Mabrouk Style Magazine, which featured Amaani dresses in 2015. This is a fashion magazine for Arabic women in the Netherlands, Belgium and Luxembourg.

19. Mr Dhillon claims that in September 2017 the Facebook page of Amaani Limited had over 80k followers. In November 2015 it had 15k followers. Mr Dhillon therefore estimates that at the date when the primary respondent was incorporated in April 2016, it had around 35k followers. However, as the respondents point out, there is no evidence as to where these followers were located. It seems likely that most of them were located in French speaking countries with significant Arabic populations.

20. In order to bring a claim under s.69(1) of the Act it is necessary to establish goodwill in the UK (which includes reputation of any description) not simply that the applicant is based in the UK. Mr Dhillon claims that his companies’ trade extends to the UK. In this connection he points to a Distribution Agreement dated July 2013 between Amaani London Limited (company No.8562669) and a distributor based in Surrey.^{[footnote 4]} The territory covered by the agreement is stated as being the UK. The distributor agreed to promote the Amaani name and distribute the products in the UK. Amaani Limited made 5 sales to an address in Surrey between February 2015 and February 2016 covering £20k worth of sarees and related clothing items.^{[footnote 5]} It seems likely that these were sales to the party acting as the company’s UK distributor. It is therefore probable that the goods were sold on in the UK.

21. In his evidence, Mr Bains challenged Mr Dhillon’s evidence that Amaani Limited carried on the business previously conducted by Amaani London Limited (company No.8562669). In this connection, he provided copies of Amaani Limited’s company accounts for the years ending 31 January 2016 and 31 January 2017. These were obtained from Companies House. They are signed by Mr Dhillon and state that the company was dormant throughout this period. In his reply evidence, Mr Dhillon proffered the explanation that Amaani Limited was dormant “shortly after incorporation due to the damage done by the Respondent’s business activity”, but that he continued to invest in the business.

22. We note that this explanation does not accord with the statement in Mr Dhillon’s first witness statement that despite the dissolution of Amaani London Limited “our business operations never halted and nothing appeared to be different to our customers except for the slight change of company name that appeared on the invoices.” This is consistent with the invoices in evidence from Amaani Limited, the first of which is dated 23 February 2015, i.e. only one month after the date of its incorporation. Nor is it consistent with Mr Dhillon’s claim in his first witness statement that “weeks after Amaani Limited was incorporated, I took on the services of a ….marketing consultant” and “we embarked on a strong Facebook advertising campaign.” Screenshots from the Facebook page are in evidence, which Mr Dhillon says date from 7 March 2015 to 27 January 2016.^{[footnote 6]} They appear to show that Amaani LTD was marketing bridal dresses. Although it is not entirely clear where they were being marketed, this reinforces the impression that the company was trading during this period.

23. In our view, despite the dormant accounts submitted to Companies House, the evidence shows that Amaani Limited was trading between 23 February 2015 and 7 April 2016. Some of this trade took place in the UK. Although more than de minimis, the volume of such trade appears small. Further, there is no evidence of actual sales to, or marketing aimed at, end users of the goods in the UK. There is therefore some doubt in our minds as to whether Amaani Limited had a qualifying reputation. However, we will assume for present purposes that the evidence is sufficient to justify the conclusion that, at the date when the primary respondent was incorporated on 7 April 2016, Amaani Limited’s goodwill extended to the UK.

Joining Amaani Limited as a party to these proceedings

24. The applicant is Mr Dhillon, not Amaani Limited. The applicant’s legal representatives point out that Mr Dhillon initially brought this claim without legal advice. It is submitted that if he was in error in naming himself as the applicant, rather than his company, we should allow him to correct that error by directing that Amaani Limited by joined as a co-applicant.

25. Rule 6(2) of The Company Names Adjudicator Rules 2008 appears to provide us with the power to direct that a party be joined as a co-applicant. The relevance of Amaani Limited to the application has been clear to the respondents from the outset. Therefore, it is difficult to see what prejudice it could suffer if we allow Amaani Limited to be joined. We are therefore minded to direct that Amaani Limited be joined as a co-applicant.^{[footnote 7]} We shall examine the remainder of the claim on the assumption that Amaani Limited will be so joined. This means that one of the applicants has the necessary goodwill to bring the case.

Similarity of names

26. We remind ourselves that the test is whether the primary respondent’s name is:

…sufficiently similar to [a name associated with the applicant in which he has goodwill]…. that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

The onus is on the applicant to establish that this condition is met. The relevant date for this purpose is the date of incorporation of the respondent (7 April 2016).

27. The respondents submit that Amaani is a common name which appears in multiple company names. The applicants deny that it is a common name in the UK, although Mr Dhillon says that it is his daughter’s name. According to the applicants, the only live UK companies with the name Amaani, which operate in the clothing and fashion sector, are companies linked to the parties to these proceedings.

28. The mere fact that there are (or are not) other registered companies owned by third parties with names including Amaani is irrelevant. This is because it would not show that any of these names are in use as trading names. Consequently, it would not be possible for us to find that the UK public has become accustomed to distinguishing different trading names incorporating the word Amaani. We find that Amaani is not a common name in the UK. It is clearly much more distinctive than the other part of the name chosen for the primary respondent – London. The presence or absence of this placename has little or no capacity to distinguish between otherwise identical and distinctive trading names. We therefore have no hesitation in finding that Amaani London Limited is sufficiently similar to Amaani Limited to mislead by suggesting that the two undertakings are connected.

29. In reaching this finding we do not need to decide on the applicant’s claims that the respondents have tried (and succeeded) in misleading people. Establishing that the respondents have taken steps which increase (or decrease) the inherent likelihood of the primary respondent’s name misleading the public may be relevant to the availability of the defences considered below. However, it is irrelevant to the prima facie applicability of s.69(1)(b), which depends solely on the similarity of the names as such.

30. We therefore find that s.69(1)(b) applies. Consequently, unless the respondents can rely on one or more of the defences set out in s.69(4), the application will succeed.

The respondents’ defences

31. The onus is on the respondents to establish that one or more of the defences apply. In its ‘Notice of defence’ the respondents mentioned two potential defences. Firstly, that the name was adopted in good faith. Secondly, that the interests of the applicant are not adversely affected to any significant extent.

32. However, in Mr Bains’ witness statement dated 29th January 2018, Mr Bains identified another potential defence under s.69(4) of the Act; namely, that the respondent was operating under the name. Indeed, he devoted a section of his statement specifically to this issue. In his statement-in-reply, dated 29 May 2018, Mr Dhillon appears to have engaged with this issue by pointing out that s.69(5) of the Act is also relevant to the applicability of the defences mentioned by Mr Bains. In fact, s.69(5) is only relevant to one of the potential defences mentioned by Mr Bains, i.e. that the primary respondent was operating under the name. We therefore find that the applicants have joined issue over whether the respondents have a defence under s.69(4)(a). In these circumstances, there can be no prejudice to the applicants from us considering and determining that matter, despite the potential defence having been raised for the first time during the evidence rounds.

33. Mr Bains’ evidence is that the primary respondent has been trading since its incorporation in April 2016. It has a website, www.amaanilondon.com, and advertises through a Facebook page. A copy of the website is in evidence.^{[footnote 8]} The name Amaani London Ltd appears on the home page. Mr Bains claims that Mr Dhillon succeeded in getting the website and Facebook page removed for a short time. We note that Mr Dhillon did not contest that claim in his statement in reply. This indicates that Mr Dhillon knows that the primary respondent is operating under its name. Indeed, part of Mr Dhillon’s complaint is that Mr Bains is misleading his customers. It is common ground that the primary respondent applied on 27 September 2016 to register a logo featuring the word Amaani as a trade mark. This is also consistent with the primary respondent operating under its name. Further, Mr Bains filed a copy of the primary respondents’ account for the year to 30 April 2017.^{[footnote 9]} These also appear to indicate that the company was trading, albeit in a small way. In the light of this evidence we accept that the primary respondent is operating under the name. This means that, subject to the applicability of the exceptions set out in s.69(5), the respondents have a defence under s.69(4)(a).

34. Mr Dhillon claims that Mr Bains incorporated the primary defendant with the purpose of obtaining money from his business and/or to prevent him from [re]registering Amaani London Limited. In support of this claim he provides details of a letter sent by Mr Bains’ solicitors on 25 July 2017 with draft particulars of a claim to the County Court for an order requiring Mr Dhillon to pay Mr Bains £47,308 in unpaid wages and unpaid loans. Mr Dhillon responds that no such proceedings were launched.

35. Clearly, we cannot express any view on the merits of the draft claim to the County Court. On the face of things, it has nothing to do with the dispute between the parties about Mr Bains’ incorporation of the primary respondent. There is no evidence that Mr Bains has ever used the name of the primary respondent as a reason why Mr Dhillon should pay him money or other consideration.

36. We note Mr Dhillon’s claim that Mr Bains was aware that he used to operate under the name Amaani London Limited. According to Mr Dhillon, he would have seen this name on his Facebook page and, in any event, Mr Bains was aware of the goodwill he had generated under that name.

37. Mr Bains denies this. He says that he had always known Mr Dhillon’s company as ‘Amaani’.

38. We note that Mr Dhillon’s case is that he and Mr Bains became re-acquainted in December 2014 and that in the months that followed, Mr Bains accompanied him on business trips to Morocco. Amaani London Limited (company No.8562669) was dissolved on 20 January 2015. It therefore appears that Mr Bains involvement with Mr Dhillon started around, or shortly after, the original Amaani London Limited was dissolved and Mr Dhillon switched his business to Amaani Limited on 23 January 2015. According to Mr Bains, he helped Mr Dhillon establish a Facebook page for marketing purposes. Indeed he claims that the ‘Amaani Ltd’ page was initially opened with his email address and telephone number. Therefore, there can be no doubt that Mr Bains knew that Amaani Limited was trading, or at least intended to trade, under that name. However, we see no evidence that he knew that Mr Dhillon’s business was previously conducted by Amaani London Limited. We therefore accept Mr Bains’ evidence that he did not know that Mr Dhillon had previously traded through that company.

39. Further, even if we are wrong about that, we do not accept that Mr Bains’ main purpose in registering the primary respondent was to prevent Mr Dhillon from [re] registering the name. The evidence suggests that Mr Bains’ main purpose in registering the primary respondent and using the name Amaani was to step into the shoes of the business carried on by Mr Dhillon through Amaani Limited. Where a party believes that it has a protectable goodwill situated in the UK, this is the sort of activity that may be challenged under the law of passing off. However, section 69 of the Act is not intended to provide an alternative remedy to a passing off action. That much is evident from the wording of s.69(4)(a) and s.69(5) of the Act. Section 69(4)(a) provides that operating under the contested name shall provide a prima facie defence. It is true that the defence does not apply where “the main purpose in registering the name was to obtain money (or other consideration) from the applicant.” However, this exception is concerned with the main purpose in registering the name, not with the registrant’s intended use of the name to divert trade from the applicant’s business. This leaves room for actions that could amount to passing off to provide a defence in actions of this kind. This is because the purpose of s.69 of the Act is provide a remedy against opportunistic company name registrations, colloquially known as ‘company name squatting’. This is not such a case.

40. We therefore accept the respondents’ defence under s.69(4)(a) and reject the application for an order requiring a change to the name of the primary respondent.

41. In the light of this there is no need to examine the respondents’ alternative defences under s.69(4)(d) and (e).

42. Further, as the application fails in any event, there is no need at this stage to make a direction that the Amaani Limited be joined as a party to the proceedings. However, in the event of an appeal, we direct that Amaani Limited be joined as a co-applicant/appellant.

Outcome

43. The application is rejected.

Costs

44. The application having failed, the respondent is entitled to a contribution towards its costs. Having regard to the published scale of costs we assess these as follows.

£350 for considering the application and filing a notice of defence;
£150 official filing fee for Form CNA2;
£750 for preparing evidence and considering the applicant’s evidence;
£150 official filing fee for Form CNA3;
£250 for filing written submissions.

45. We therefore order Mr Simon Dhillon to pay Amaani London Limited (company number 10108476) the sum of £1650. This sum to be paid within 14 days of the period allowed for appeal or, if there is an appeal, within 14 days of the conclusion of the appeal proceedings (subject to any order of the appellate tribunal).

Dated 2 August 2018

Allan James
Judi Pike
Mark King

Company Name Adjudicators

1. See exhibit SD4 to Dhillon 1. ↩

2. See exhibit SD14 to Dhillon 1. ↩

3. See exhibit SD9 to Dhillon 1. ↩

4. See exhibit SD26 to Dhillon 2. ↩

5. See the invoices at exhibit SD25 to Dhillon 2. ↩

6. See exhibit SD9 to Dhillon 1. ↩

7. ok See, by analogy, TAO ASIAN BISTRO, BL O/004/11, a decision of the Appointed Person in a trade mark case based on similar procedural Rules. ↩

8. See page 19 of exhibit DB1. ↩

9. See pages 17 and 18 of exhibit DB1. ↩