Decision

Decision on Capita Gold Ltd

Published 11 June 2019

Companies Act 2006

In the matter of application No 1568 by Capita Plc for a change to the company name of Capita Gold Ltd, company registration no. 10911257.

1. Company no. 10911257 (“the primary respondent”) was incorporated on 11th August 2017 with the name Capita Gold Ltd (hereafter “CGL”). This name has caused Capita Plc (hereafter “CP”) (“the applicant”) to make an application to this Tribunal, on 27th September 2017, under section 69 of the Companies Act 2006 (“the Act”).

2. Section 69 of 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 or directors 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 these 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.”

3. At the request of CP, CGL’s directors i.e. Partha Pratim Neogi and Suresh Chandra Pandya were joined to the proceedings under the provisions of section 69(3) of the Act. Both the aforementioned were given notice of this request and an opportunity to comment or to object. The Tribunal received no comments or objections and they were joined to the proceedings as co-respondents on 18th December 2017.

4. CP states that the name associated with it is CAPITA and that it has a vast reputation and goodwill in this regard in respect of business process outsourcing; professional and support services across a broad range of sectors including property infrastructure, real estate, construction (including oil, gas and mining) and building design and completion; insurance; financial services; transport, health and corporate/treasury; efficiency services; ICT, HR and recruitment and employment services. CP supplies its services to central government agencies, local government, education and healthcare authorities and a large number of public and private companies spanning a wide variety of fields of business. It was incorporated on 8th December 1986. It explains that it objects to CGL’s name because the name CAPITA GOLD is identical or, misleadingly similar to the Applicant’s registered trade mark CAPITA as it would mislead the public into thinking there is a connection between them. That is, that the public will presume that the services offered by CGL are endorsed by or connected with CP. This link will cause confusion on the part of the public who associate CAPITA with CP, resulting in a severe loss of reputation and goodwill in the CP’s registered rights.

5. CP indicates that it is claiming costs and states that it sent an email to CGL on 14th September 2017 requesting that CGL enter into an undertaking to take steps to change its name by 28th September 2017. CGL responded and stated that it would not change its name.

6. CGL filed a notice of defence, which consists of a denial of the grounds on which the application is based. In particular, CGL states:

• that CP have no proof they are operating in the same field as CGL;
  
  
• that CP want absolute control over the use of CAPITA (no matter the context);
  
  
• that CGL’s only interest is to acquire a Gold Mining Concession in Sierra Leone. As such, there can be no confusion.

7. CGL indicated that it was relying upon all available defences, though it is noted that one of the defences is not claimed in its entirety. This relates to the defence that CGL’s company is operating under the name, or is proposing to do so and has incurred substantial start-up cost in preparation, or was formally operating under the name but is now dormant. It is the aspects highlighted in bold which have been excluded by CGL.

8. In these proceedings, CGL represents itself. CP is represented by Irwin Mitchell LLP. Both parties filed evidence. They were asked if they wished for a decision to be made following a hearing or from the papers. Although neither side chose to be heard, CP filed written submissions in lieu of attendance at a hearing. We make this decision following careful consideration of all the papers filed by both parties.

Evidence

CP’s evidence

9. This consists of a witness statement, dated 12th March 2018, from Ms Francesca Anne Todd, the Group Company Secretary of CP. She explains that:

• since its incorporation in 1986, CP has grown to become the UK’s largest business outsourcing and professional services company, employing approximately 73,000 people. Its turnover is split roughly equally between the private and public sector. This turnover (in total) was £4.9 billion in 2016, with profit before tax of £475.3 million. Exhibit 1 contains extracts from Capita’s company accounts for 2016 in support
  
  
• in January 2017, CP announced a restructure into six market facing divisions: digital and software solutions, private sector partnerships, public service partnerships, professional services, asset services and IT services
  
  
• since its incorporation, CP has provided professional business outsourcing services to a wide range of organisations across a broad spectrum of private industry and public service sectors. CP has built expertise across the spectrum of common operational processes used in typical services and organisations, including customer services (for instance managing call centres and handling customer enquiries), back office processes, provision of human resources, information and communication technology, property consultancy and finance and treasury services
  
  
• according to Ms Todd, CP spends a great deal of time and money on building its reputation and goodwill and significant sums are spent on advertising and publicising the brand. Examples of advertising activities undertaken are described (specialist industry sector magazines and newspapers) but no corroborative evidence is in support.
• CP has been involved in corporate sponsorship agreements, e.g partnerships with the Alzheimer’s Society, The Prince’s Trust and CodeBase. An announcement, seemingly from CP’s website describes the CodeBase partnership
  
  
• an example of press coverage is provided in Exhibit 7. One of which is from the Daily Telegraph and is dated 21st December 2017. It refers to a contract to provide internet services for Transport for London
  
  
• according to Ms Todd, CAPITA’s reputation is founded upon trust, reliability, integrity and stability. Ms Todd concludes her statement by stating that it has provided sufficient evidence to demonstrate that CAPITA is a well known household name in the eyes of the public and has significant reputation and goodwill in respect of relevant consumers, which may lead such consumers to mistakenly link Capita Gold with Capita

CGL’s evidence

10. This is a witness statement, dated 25th July 2018, from Partha Pratim Neogi, the Director of CGL. The following points are contained therein:

• CGL is a Gold Mining Company. This mining business will take place in Sierra Leone. Thus far, significant activity in set up has occurred: such as transfer of exploration/concession license and active discussions with investors. Documentation is provided in terms of the license mentioned and also appears to show incorporation of a Capita Gold company in Sierra Leone, though this is in a different name to that in the proceedings here (Capita Gold (SL) Limited)
  
  
• CGL does not deal in any products or services in the UK and therefore the question of confusion amongst customers (or any free riding allegation) does not arise
  
  
• CP has not provided any evidence that CGL has breached any of its intellectual property rights
  
  
• if CGL is made to surrender its name, it will lose its concession license, lose the opportunity to generate wealth, lose goodwill with the Sierra Leone Government and the local community in the mining area. In terms of not providing any evidence of use under the name “Capita Gold”, Mr Neogi advises that they are waiting for the dispute, the subject of these proceedings to be settled
  
  
• Mr Neogi concludes by asserting that CGL has no intention (and never has) to associate itself with CP.

CP’s evidence in reply

1. This is a further witness statement, dated 5th November 2018, from Ms Todd. Some of this repeats information and/or submissions already set in out in her first witness statement, summarised above. As such, I shall not repeat them. However the following points are noted:

• Ms Todd concludes from the evidence provided by CGL that it is not operating in the UK. As such, she is of the view that it is merely exploiting CP’s goodwill
  
  
• the documentation provided by CGL involves another company and there is nothing contained in the evidence to show that this company is in any way linked to CGL
  
  
• no evidence has been provided of substantial investment by CGL
  
  
• Ms Todd reasserts that CP enjoys a significant reputation in business outsourcing and financial services. As such, it is clear that customers will be confused
  
  
• CGL has provided no evidence that it would lose its business or be affected by a change in name

Goodwill

12. It is noted from the evidence that CP is a long established provider of business outsourcing and professional services to business. This includes activities such as IT services, human resources and the like. It is considered that the evidence speaks for itself and it is clear that at the relevant date (the date of incorporation of the contested company name) of 11th August 2017, CP enjoyed a significant goodwill in CAPITA.

Are the names “sufficiently similar”?

13. The respective company names must also be “sufficiently similar” that use of CGL’s name in the UK would be likely to mislead by suggesting a connection between the parties. The name relied upon is CAPITA. The contested name is CAPITA GOLD Ltd. It is considered obvious that the most distinctive element in CAPITA GOLD is CAPITA. The addition of GOLD is likely to be seen as denoting a more luxurious version of a particular service (or possibly even as a descriptor for a service of gold mining). Further, “Ltd” will be seen as a descriptor for the particular company structure as regards liability. In any case, it is considered that the names are sufficiently similar that the use of CGL’s name in the UK would be likely to mislead by suggesting a connection between the parties, under Section 69(1)(b) of the Act.

Defences

14. As the ground specified in subsection 69(1)(b) is established, the onus switches to CGL to establish whether it can rely on any of the defences relied upon. It is noted from the counterstatement that CGL relies on a number of the available defences. These shall be considered in turn:

Section 69(4)(b)(i): that the company is operating under the name

15. The relevant date for consideration of this defence is the date on which the applicant filed its complaint to the Tribunal (on Form CNA1): 27th September 2017.

16. The evidence filed by CGL has been considered carefully. There is no evidence at all that CGL is operating a company under the name CAPITA GOLD. This defence therefore fails.

The good faith defence

17. The relevant date for assessing good faith is the date of incorporation, i.e. 11th August 2017. The burden of proving that the company name was registered in good faith falls upon CGL. The onus is not on CP to prove bad faith. This means that it is CGL’s evidence which is crucial in establishing how the company name came to be registered.

18. In 1) Adnan Shaaban Abou-Rahmah (2) Khalid Al-Fulaij & Sons General Trading & Contracting Co v (1) Al-Haji Abdul Kadir Abacha (2) Qumar Bello (3) Aboubakar Mohammed Maiga (4) City Express Bank of Lagos (5) Profile Chemical Limited [2006] EWCA Civ 1492, Rix LJ commented upon the concept of good faith: “48. The content of this requirement of good faith, or what Lord Goff in Lipkin Gorman had expressed by reference to it being “inequitable” for the defendant to be made to repay, was considered further in Niru Battery. There the defendant bank relied on change of position where its manager had authorised payment out in questionable circumstances, where he had good reason to believe that the inwards payment had been made under a mistake. The trial judge had (a) acquitted the manager of dishonesty in the Twinsectra or Barlow Clowes sense on a claim of knowing assistance in breach of trust, but (b) concluded that the defence of change of position had failed. On appeal the defendant bank said that, in the absence of dishonesty, its change of position defence should have succeeded. After a consideration of numerous authorities, this court disagreed and adopted the trial judge’s broader test, cited above. Clarke LJ quoted with approval (at paras 164/5) the following passages in Moore-Bick J’s judgment:”

“I do not think that it is desirable to attempt to define the limits of good faith; it is a broad concept, the definition of which, in so far as it is capable of definition at all, will have to be worked out through the cases. In my view it is capable of embracing a failure to act in a commercially acceptable way and sharp practice of a kind that falls short of outright dishonesty as well as dishonesty itself.”

1. In (1) Barlow Clowes International Ltd. (in liquidation) (2) Nigel James Hamilton and (3) Michael Anthony Jordon v (1) Eurotrust International Limited (2) Peter Stephen William Henwood and (3) Andrew George Sebastian [2005] UKPC 37, the Privy Council considered the ambiguity in the Twinsectra Ltd v Yardley [2002] 2 AC 164 judgment. The former case clarified that there was a combined test for considering the behaviour of a party: what the party knew at the time of a transaction and how that party’s action would be viewed by applying normally acceptable standards of honest conduct.

20. It is noted that CGL does not provide any evidence as to how it came up with the name CAPITA. Its only response on the point is that it had never heard of CAPITA prior to its application to register its company name. It does not explain how it came up with the name. Further, it has not explained why it registered a UK company name when it states that it intends to operate a gold mining concession in Sierra Leone and that it does not deal in any products and services in the UK. Bearing in mind the onus is on CGL to prove it has acted in good faith, it is considered that this lack of evidence (and accompanying explanation) is inadequate to discharge its evidential burden. This defence therefore also fails.

CGL’s name was registered before CP’s goodwill established

21. The date of incorporation was 11th August 2017. The evidence from CP clearly demonstrates that its goodwill is long standing and obviously in evidence by this date. This defence therefore also fails.

That CGL’s name was registered in the ordinary course of a company formation business

22. Again, there is no evidence in support of such a defence on the part of CGL. It fails.

That the interests of CP are not adversely affected to any significant extent

23. In this regard, CGL’s argument is that it is operating in an entirely different field to CP and so it cannot see how it can be adversely affected at all by CGL’s activities. The onus is on CGL to prove that CP will not be adversely affected. It has filed no evidence to do so and relies upon the aforementioned argument only. It is noted that in its company information details, the nature of the company includes “management consultancy activities other than financial management”. This is a service which can be provided to businesses and as such, there is clear potential for overlap with the services of CP (whose activities in terms of outsourcing for business is far reaching and diverse). It is entirely foreseeable that if the customers of such services offered under CAPITA GOLD are in some way dissatisfied, they may be dissuaded from acquiring the services of CP. This may hamper CP’s ability to both retain existing customers and acquire new ones. As such, it in effect, loses control over its own reputation. Such a scenario means that we are satisfied that CP’s interests may be adversely affected to a significant extent. As such, this defence also fails.

Outcome

24. As we have dismissed all the possible defences, the application succeeds.

1. Therefore in accordance with section 73(1) of the Act, we make the following order:
   
   a) Capita Gold Ltd shall change its name within one month of the date of this order to one that is not an offending name ^{[footnote 1]};
   
   b) Capita Gold Ltd, Partha Pratim Neogi and Suresh Chandra Pandya each shall:
   
   (i) take such steps as are within their power to make, or facilitate the making, of that change;
   
   (ii) not to cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name.

26. In accordance with Section 73(3) of the Act, this order may be enforced in the same way as an order of the High Court or, in Scotland, the Court of Session.

27. In any event, if no such change is made within one month of the date of this order, we will determine a new company name as per section 73(4) of the Act and will give notice of that change under section 73(5) of the Act.

28. All respondents, including Partha Pratim Neogi and Suresh Chandra Pandya have a legal duty under Section 73(1)(b)(ii) of the Act not to cause or permit any steps to be taken calculated to result in another company being registered with an offending name; this includes the current company. Non-compliance may result in an action being brought for contempt of court and may result in a custodial sentence.

Costs

29. CP has been successful and is entitled to a contribution towards its costs, based upon the scale of costs published in the Tribunal’s Practice Direction. The level awarded is as follows:

Fee for application: £400

Preparing a statement and considering CGL’s statement: £400

Preparing evidence and considering and commenting upon CGL’s evidence: £600

Fee for filing evidence: £300 i.e. 2 x £150

Total: £1700

30. We order Capita Gold Ltd, Partha Pratim Neogi and Suresh Chandra Pandya being jointly and severally liable, to pay the sum of £1700 within fourteen days of the expiry of the appeal period, or within fourteen days of the final determination of this case if any appeal against this decision is unsuccessful. Under section 74(1) of the Act, an appeal can only be made in relation to the decision to uphold the application; there is no right of appeal in relation to costs.

31. Any notice of appeal against this decision to order a change of name must be given within one month of the date of this order. Appeal is to the High Court in England, Wales and Northern Ireland and to the Court of Session in Scotland.

32. The company adjudicator must be advised if an appeal is lodged, so that implementation of the order is suspended.

Dated 3 June 2019

Louise White
Company Names Adjudicator

Judi Pike
Company Names Adjudicator

Oliver Morris
Company Names Adjudicator

1. An “offending name” means a name that, by reason of its similarity to the name associated with the applicant in which he claims goodwill, would be likely to be the subject of a direction under section 67 (power of Secretary of State to direct change of name), or to give rise to a further application under section 69. ↩