Decision

Decision on Capita Support Ltd

Updated 13 March 2020

Companies Act 2006

In the matter of application No. 1784 by Capita PLC

For a change of the company name of registration No 11331710

Background, claims and defences

1. Company no. 11331710 (“the primary respondent”) was incorporated on 26 April 2018 with the name CAPITA SUPPORT LTD. This name has caused Capita Plc (“the applicant”) to make an application to this Tribunal, on 2 July 2018, 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. In its Form CNA1 (the claim form), the applicant requested that Mr Nicholas Athanasiou, the primary respondent’s sole director, be joined to the proceedings under the provisions of section 69(3) of the Act. Mr Athanasiou was given notice of this request and an opportunity to comment or to object. The Tribunal received no comments or objections and Mr Athanasiou was joined to the proceedings as a co-respondent on 7 September 2018.

4. In its claim, the applicant 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 and professional services across a broad range of sectors. It states that there are 88 entities that are part of its corporate group. It states that it has a turnover of £4.23 billion and that 90% of this is derived by its companies that use the CAPITA name. It explains that it objects to the respondent’s name because it is identical or, highly similar to, its registered trade mark CAPITA. It states that the company name is sufficiently similar, such that its use in the UK would be likely to mislead by suggesting a connection between it and the applicant.

5. The applicant states that it is claiming costs and that it sent a letter to the primary respondent on 9 May 2018 requesting that it agree an undertaking to take steps to change its name to avoid confusion. It adds that Mr Athanasiou responded on 21 May 2018 rejecting this request. The response is attached to the claim form in which the primary respondent states that the businesses can be differentiated by way of branding and the fact that one is a large multi-national, the other an SME; it is, though, added that the company could be sold to the applicant if it still has serious concerns.

6. The primary respondent filed a notice of defence, which consists of a denial of the grounds on which the application is based and requiring the applicant to prove its allegations. It also requests its costs. The primary respondent relies on three of the defences under section 69(4) of the Act, namely:

• 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
• that the name was adopted in good faith
• that the interests of the applicant are not adversely affected to any significant extent
  
  

7. We note the following reasons made in the notice of defence in relation to the applicant’s interests not being adversely affected to any significant extent:

• that the core business activities of the applicant (business process management and outsourcing) are very different from the primary respondent (procurement services and related support)
• that the primary respondent only operates on a business to business basis and that any such business customer, undertaking the slightest amount of due diligence, will immediately ascertain that there is no link with the applicant
• none of the names within the Capita group contain the word “support” in their title; it was therefore freely available and the applicant could have acquired it prior to the primary respondent being incorporated
• that the applicant has provided no evidence showing it would suffer, or is suffering, any severe loss of goodwill or reputation

8. We note the following reason made in the notice of defence in relation to the primary respondent’s name being adopted in good faith:

• the primary respondent was adopted in good faith in the ordinary course of a company formation. It does not believe that there is any confusion for reasons largely rehearsed in response to the applicant’s letter requesting an undertaking to change its name

9. Finally, we note the additional comment that the applicant has been advised that the respondent’s name is available for sale, an option it has chosen not to explore to date.

10. In these proceedings, the applicant is represented by Irwin Mitchell LLP whereas the primary respondent and co-respondent represent themselves. The parties were asked if they wished for a decision to be made following a hearing or from the papers. Neither side chose to be heard or 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

11. We do not propose to provide a stand-alone summary of the evidence. We will instead refer to it when it is relevant to the determinations required of us. For the record, the following is provided:

• by the applicant – the only material provided in addition to its statement of case is a witness statement from Francesca Ann Todd, the applicant’s company secretary
• by the respondents – beyond its notice of defence (summarised above), no further evidence was filed. Although not counting as evidence, we note that in a letter dated 18 January 2019, in response to a comment in the applicant’s evidence in which an allegation of bad faith is made (on the basis that it was chosen to trade off the applicant’s reputation and force it into purchasing the company), it is stated that this is simply not the case. It states that it would have been remiss not to consider offers from third parties to buy the company, that it has not actively encouraged the applicant to purchase, and that it is prepared to sign an undertaking that it will never sell the company to the applicant

Decision

12. If the primary respondent defends the application, as here, the applicant must establish that it has goodwill or reputation in relation to a name that is the same, or sufficiently similar, to that of the company name suggesting a connection between the company and the applicant. If this burden is fulfilled, it is then necessary to consider if the primary respondent can rely upon any of the defences under section 69(4) of the Act.

13. The applicant must first show that it had a goodwill or reputation associated with the name relied upon i.e. CAPITA. The relevant date to consider is the date on which the allegedly offending company name was incorporated, which, in this case, was 26 April 2018.

Goodwill

14. Section 69(7) of the Act defines goodwill as a “reputation of any description”. Consequently, in the terms of the Act it is not limited (but can include) Lord Macnaghten’s classic definition in IRC v Muller & Co’s Margerine Ltd [1901] AC 217:

“What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.”

15. This is where the applicant’s evidence, from Ms Todd, is particularly pertinent. Her witness statement is dated 6 November 2018, and we note the following:

• since its incorporation in 1986, the applicant has grown to become the UK’s largest business process outsourcing and professional services company, employing approximately 73,000 people. Its turnover is split roughly equally between the private and public sector. Its revenue (in total) was £4.17 billion in 2017, with profit before tax of £383 million. Exhibit 1 contains extracts from its company accounts for 2017 in support (exhibit FT1/1)
• the applicant owns 449 subsidiaries, 359 in the UK (exhibit FT1/2-6). 88 have the word CAPITA in their names. It is stated that over 90% of the group’s turnover is generated by operations that use the name CAPITA.
• since its incorporation, the applicant has provided professional business outsourcing services to a wide range of organisations across a broad spectrum of private industry and public service sectors. It has built expertise across the spectrum of common operational processes used in typical services and organisations, including delivering and managing ICT support services, and designing and building network solutions. It is involved in other sectors including customer services, back office processes, provision of human resources, property consultancy and finance and treasury services. Ms Todd states that the applicant is known for providing support from the outset, with strategic consultation on a project, right through to implementation
• the applicant currently owns 217 UK or EU trade marks, 15 of which contain the word CAPITA (exhibit FT 1/7-29)
• according to Ms Todd, the applicant spends a great deal of time and money 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 provided in support
• the applicant has been involved in what is described as “work in the community”. It has worked in partnership with the Alzheimer’s Society and The Prince’s Trust
• the applicant has won a number of awards including: Company of the Year 2003 (Royal Bank of Scotland/Sunday Times Business Awards), Winners of the Evening Standard Homes and Property Award 2006, BPO Service Provider of the Year in the National Outsourcing Association Awards 2006, Britain’s Most Admired Company by Management Today in 2008, Corporate Adviser Firm of the Year in 2007 and, also in 2007, two housing design awards. Exhibit FT1/30-32 contains an extract from the applicant’s “News” part of its website, which lists some other awards including: “Capita wins four awards at CCA Excellence Awards 2017” and “Capita wins top award at the Corporate Adviser Awards 2017”; other awards and nominations are mentioned in the exhibit
• Ms Todd states that it receives significant press coverage including in (but not limited to) UK national and regional newspapers. She says the applicant is featured or commented upon daily. Two recent examples are given in exhibit FT1/33-36: the first is from the publication Directors Talk and is dated 5 November 2018 (which is after the relevant date), which relates to Capita (reference is made to Capita Plc and Capita generally) confirming the sale of its parking management business ParkingEye – we additionally note that there are 9 other articles dated from June-October 2018 which can be clicked upon at the bottom of page; the second is from CBR Government which records the fact (on 26 October 2018, again after the relevant date) that “Capita wins £5.7 million contract from Essex NHS trust for new WAN”
• according to Ms Todd, CAPITA’s reputation is founded upon trust, reliability, integrity and stability

16. It is noted from the evidence that the applicant 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. Notwithstanding that the evidence could have been better (by providing examples of advertising and providing press coverage from before instead of after the relevant date), it is considered that the evidence speaks for itself and it is clear that at the relevant date the applicant enjoyed a significant goodwill associated with the word CAPITA. We note that the respondents have not sought to challenge the existence of goodwill. Indeed, one of the points it does make is that anyone conducting reasonable due diligence will identify that the applicant is a large multi-national – whilst this is not expressed as a concession, this points more towards the existence of goodwill rather than away from it. The applicant has the requisite goodwill.

Similarity of names

17. The respective names must be “sufficiently similar” that use of the primary respondent’s company name in the UK would be likely to mislead by suggesting a connection between the two. The names are as follows:

CAPITA

v

CAPITA SUPPORT LTD

18. It is considered obvious that the most distinctive element in Capita Support Ltd is Capita. The addition of “Support” is likely to be seen as denoting that the company provides some form of support service and, further, “Ltd” will be seen as a descriptor for the particular company structure with regard to its liability. The commonality of CAPITA is very clear. The combination of such commonality, with the dominance of that aspect, points strongly towards a finding that the names are sufficiently similar to mislead by suggesting a connection between the parties.

19. We also consider it appropriate to take into account the nature of the goodwill relied on by the applicant. The use in section 69(1) of the Act of the words “a name associated with the applicant in which he has goodwill” indicates that the applicant’s goodwill is to be considered in the assessment of whether use of the contested name is likely to mislead. In that respect, it is noted that the applicant’s goodwill relates to business to business outsourcing and other professional services. Even if it would not ordinarily be appropriate to describe such activities as “support” services, the inclusion of such a word in the respondent’s name would not create any form of dichotomy. Its inclusion would be seen as a reference to the support arm of Capita.

20. For both these reasons, we find that the names are sufficiently similar to mislead by suggesting a connection between the parties. For the sake of clarity, even if we were wrong to have included the reason in paragraph 19 above, we would have made such a finding based purely on the reasons provided in paragraph 18.

21. We should also explain why some of the respondent’s arguments are not pertinent. In relation to the point about different branding being used, it should be noted that the Tribunal has not been provided with evidence showing the differing forms of branding and, in any event, branding is temporal in nature and cannot bind any future use. Furthermore, it is the names giving rise to the connection with which the Tribunal is concerned, not any branding that may or may not be used in relation to them. The respondent’s have also said that due diligence checks would reveal that one business is a multi-national the other a SME; however, this, again, is not a feature of the names, and is not a factor that ought to be taken into account. Finally, we note the respondent’s point that none of the applicant’s group names feature the word “support” and that it (the applicant) could have registered it prior to the incorporation of the primary respondent. This may be true, but in our view it does nothing to inhibit the relevant connection being made, for the reasons we have given.

22. In summary, the applicant has satisfied us that it has the requisite goodwill associated with the name CAPITA, and that the use of the respondent’s name is sufficiently similar to mislead by suggesting a connection between the parties. That means that the onus switches to the primary respondent to show that it may avail itself of one of the pleaded defences.

Defences

23. As stated earlier, in its notice of defence the primary respondent identified three of the statutory defences under 69(4) of the Act that it wished to rely on. These shall be considered in turn:

The good faith defence

24. The relevant date for assessing good faith is the date of incorporation, i.e. 26 April 2018. The burden of proving that the company name was registered in good faith falls upon the primary respondent. The onus is not on the applicant to prove bad faith. This means that what the primary respondent has said is crucial in establishing how the company name came to be registered.

25. 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.”

26. 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.

27. It is noted that the primary respondent (or the co-respondent) does not provide any evidence as to how it came up with the word CAPITA to use as (the dominant) part of its name. It does not even say whether it had heard of CAPITA (the applicant) prior to its application to incorporate the company under that name. It states that the name was registered (it specifically says “adopted”) as part of an ordinary company formation. That tells us nothing about the state of knowledge or relevant motivation. There is an assertion that the business operates, or is to operate, in the field of procurement. However, there is no evidence of how it has done so, or intends to do so, upon which to test the proposition of good faith. Bearing in mind the onus is on the primary respondent 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, fails. We should add that the offer to sell the company to the applicant is not something which has materially weighed in our mind. With or without this evidence, the defence would have failed.

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

28. Again, there is no evidence in support of such a defence. All it has said is that the name was registered as part of an ordinary company formation. This is not the same as the name being registered as part of a company formation business - a business which specialises in off-the-shelf companies for other businesses to procure. Further, the second part of this defence states that the company must be “available for sale to the applicant on the standard terms of that business”. Whilst the primary respondent has signified a willingness to sell the company to the applicant, it has not shown that it was available for sale on the standard terms of a company formation business. It may be that the primary respondent has misunderstood the significance of the defence, either way, this defence also fails.

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

29. In this regard, one of the primary respondent’s arguments is that it is operating in an entirely different field to the applicant and, so, it cannot see how it can be adversely affected by the primary respondent’s activities. The onus is on the primary respondent to prove that the applicant will not be adversely affected. It has filed no evidence to do so and relies upon the aforementioned argument (and some others we come on to) without even showing how it operates, or intends to operate. In any event, a business specialising in the field of procurement, which the primary respondent accepts is a business to business service, is not a million miles from outsourcing. There is, in our view, a clear potential for overlap with the services of the applicant (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 by a company called Capita Support Ltd are in some way dissatisfied, they may be dissuaded from acquiring the services of the applicant. This may hamper the applicant’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 the applicant’s interests may be adversely affected to a significant extent. As such, this defence also fails.

30. The other arguments put forward by the primary respondent are based on factors which may avoid confusion. We have already dealt with such matters, so need say no more. We also add that the respondents’ point that the applicant has filed no evidence of loss or potential loss is not overly significant; this is because it is the primary respondent that must establish the defence.

Outcome

31. As we have dismissed all the defences put forward, the application succeeds.

32. Therefore, in accordance with section 73(1) of the Act, we make the following order:^{[footnote 1]}.

a) Capita support Ltd shall change its name within one month of the date of this order to one that is not an offending name;

b) Capita Support Ltd and Mr Nicholas Athanasiou 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.

33. 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.

34. 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.

35. All respondents, including Mr Nicholas Athanasiou, 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

36. The applicant 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 the defence: £400
Preparing evidence: £600
Official fee for filing evidence: £150

Total: £1550

37. We order Capita Support Ltd and Mr Nicholas Athanasiou, being jointly and severally liable, to pay to Capita Plc the sum of £1550 within 21 days of the expiry of the appeal period, or within 21 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.

38. 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.

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

Dated 21st November 2019

Oliver Morris
Company Names Adjudicator

Louise White
Company Names Adjudicator

Christopher Bowen
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. ↩