Decision

Decision on Close Bros Invoice Finance Limited

Published 18 May 2022

Order under the Companies Act 2006

In the matter of application no. 3755

By Close Invoice Finance Limited

For a change of company name of registration

No. 13328837

Background

1. The company name CLOSE BROS INVOICE FINANCE LIMITED has been registered since 12 April 2021 under number 13328837 (“the primary respondent”). The Companies House website lists two directors, namely David Lawrence Fabb and Greg Taft.

2. By an application filed on 17 December 2021, Close Invoice Finance Limited (“the applicant”) applied for a change of name of this registration under the provisions of s. 69(1) of the Companies Act 2006 (“the Act”). The applicant is represented by Addleshaw Goddard LLP.

3. A copy of the application was sent to the primary respondent’s registered office on 4 February 2022, in accordance with rule 3(2) of the Company Names Adjudicator Rules 2008 (“the Rules”). The primary respondent was allowed until 4 March 2022 to file a defence on Form CNA2 accompanied by the official fee of £150. I note that the letter contained the following (original emphasis):

If you choose not to file a form CNA 2 and the £150 fee the adjudicator may treat the application as not being opposed and may make an order under section 73(1) of the Companies Act 2006.

If you decide not to defend your company name, the application will normally succeed. A decision in favour of the applicant will normally include an award of costs in favour of the applicant, provided costs have been requested by the applicant.

4. On the same date, the tribunal wrote to Messrs Fabb and Taft to inform them that the applicant had requested that they be joined to the proceedings as co-respondents. They were allowed until 4 March 2022 to comment upon that request.

5. Neither the primary respondent nor the co-respondents responded to the tribunal’s letters. Accordingly, on 18 March 2022, the tribunal wrote to the primary respondent advising it that,

As no CNA 2 has been filed within the time period set, in accordance with Rule 3(4) the adjudicator may treat the application as not being opposed and may make an order under section 73(1) of the Companies Act 2006.

6. The primary respondent was also advised that either party had the right to be heard in accordance with rule 5(3) and that a hearing could be requested by the filing of a form CNA4 (“Request for a hearing to be appointed”), with the accompanying fee of £100, on or before 1 April 2022.

7. The tribunal also wrote to Messrs Fabb and Taft on 18 March 2022, confirming that they had been joined as co-respondents and that this decision could likewise be disputed by filing a form CNA4 and fee by 1 April 2022.

8. On 30 March 2022, the primary respondent filed a form CNA4. It was completed by Mr Fabb. No reasons were given for the failure to file the form CNA2, either on the form CNA4 or in the letter accompanying the CNA4, which was addressed to the applicant’s representatives.

9. On 25 April 2022, the tribunal wrote to the parties expressing its view that the primary respondent had exercised its right to a hearing and appointed a Case Management Conference (“CMC”) for Friday 6 May 2022 to discuss the primary respondent’s failure to file a form CNA2. The letter included the following (original emphasis):

[…] The purpose of the CMC is to determine whether the proceedings should continue; it is not a determination on the merits of the applicant’s claim. The Adjudicator has discretion to extend any time limit under Rule 7, including that for filing a counterstatement, but there is no discretion to waive the requirement for a counterstatement (which must be filed on a form CNA2). The Adjudicator will therefore require that the respondent file a form CNA2 and counterstatement, along with a witness statement explaining why the deadline was missed, no later than 2pm on 4 May 2022. Those documents should be copied to the applicant. The respondent should also be prepared to explain at the CMC why the Adjudicator should now exercise their discretion in the respondent’s favour.

10. A form CNA2 was filed on 4 May 2022 but without a witness statement.

11. The CMC was held before me as scheduled, by telephone conference. The primary respondent was represented by Mr Fabb. The applicant was represented by Rayan Fakhoury of counsel, instructed by Addleshaw Goddard.

Decision

12. The relevant rules are as follows:

3(3) The adjudicator shall specify a period within which the primary respondent must file its defence. (4) The primary respondent, before the end of that period, shall file a counter-statement on the appropriate form, otherwise the adjudicator may treat it as not opposing the application and may make an order under section 73(1).

[…]

7(1) The adjudicator may extend (or further extend) any period which has been specified under any provision of these Rules even if the period has expired.

(2) Any party can request an extension of any time period specified under any provision of these Rules.

(3) Any request for a retrospective extension must be filed before the end of the period of 2 months beginning with the date the time period in question expired.

(4) Any request made under paragraph (2) shall be made on the appropriate form and shall include reasons why the extra time is required. A request for a retrospective extension shall also include reasons why the request is being made out of time.

13. I decided having heard the parties that I would not exercise my discretion to extend the deadline for filing the form CNA2 and that the application would be treated as unopposed. My decision meant that some of the issues addressed or planned to be discussed at the CMC became moot, most notably the applicant’s request for security for costs. In addition, Mr Fakhoury had filed a skeleton argument in advance and, for the most part, relied upon the submissions contained therein. Consequently, I do not intend to repeat all of the submissions made at the CMC but will focus upon those relevant to my decision. I should add that, although Mr Fabb complained that he had only received the skeleton argument the day before (at the same time as the tribunal), he confirmed that he had read it. I gave brief reasons for my decision at the CMC and said I would give my full reasons in writing. That I now do.

14. Mr Fabb did not dispute that the primary respondent received the form CNA1 and the tribunal’s accompanying letter. However, he said that there were extenuating circumstances for the failure to file the form CNA2. First, he had been heavily engaged in preparing a statement of case for Court proceedings for a period of three months. He was unaware of the deadline for filing the form CNA2 which, he accepted, was because he had not read the letter properly. Second, Mr Fabb indicated that he was without any funds because he had spent considerable sums on other proceedings.

15. I recognise that mistakes are sometimes made but it is an inadequate response to state that official correspondence in connection with company assets was simply not read carefully. There appears to have been no system for checking or recording official correspondence and the deadline was missed because the minimum degree of vigilance in reading the official correspondence was lacking. In this, the primary respondent is the author of its own misfortune.

16. As far as Mr Fabb’s financial embarrassment is concerned, whilst an inability to raise funds may be of relevance in some circumstances, I am doubtful that this would apply where the choice has been made to spend the sums on other proceedings, particularly in the absence of clear evidence that there were, for example, deadlines close together which led to a temporary cashflow difficulty. That misses the larger point in this case, however, which is that even if sufficient funds had been available, it would not have helped, because the primary respondent was not aware of the deadline, through nobody’s fault but its own. Even if these reasons had been provided in the form of a witness statement, in compliance with the express direction of the tribunal, I did not consider that they constituted a good reason to exercise my discretion under rule 3(4) or 7(1).

17. Therefore, in accordance with s. 73(1) of the Act, I make the following order:

• CLOSE BROS INVOICE FINANCE LIMITED shall change its name within one month of the date of this order to one that is not an offending name;
  
  
• CLOSE BROS INVOICE FINANCE LIMITED, Mr David Lawrence Fabb and Mr Greg Taft each shall:
  
  
• take such steps as are within their power to make, or facilitate the making, of that change;
  
  
• not cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name.

18. In accordance with s. 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.

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

20. All respondents including individual co-respondents have a legal duty under s. 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

21. The applicant contacted the primary respondent on 12 November 2021 to warn it that, unless the primary respondent changed the company name, proceedings would be launched before this tribunal. I therefore see no reason to deny the applicant, as the successful party, an award of costs. The applicant requests an award on the scale. It seeks £400 for preparing the application and £600 for attending the hearing. I appreciate that the instruction of counsel increased the applicant’s expenses but the scale maximum for a hearing (£1,500) is for a full day’s hearing on the substance; this was a CMC lasting approximately 40 minutes. I award costs to the applicant as follows:

Preparing the application: £400
Fee for filing the application: £400
Hearing: £400

Total: £1,200

22. I order CLOSE BROS INVOICE FINANCE LIMITED, Mr David Lawrence Fabb and Mr Greg Taft (jointly) to pay to Close Invoice Finance Limited the sum of £1,200 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 s. 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.

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

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

Dated 13 May 2022

Heather Harrison
Company Names Adjudicator