Decision

Decision on Enotrac Europe Ltd

Published 8 October 2021

Companies Act 2006

In the matter of application no. 3285

By Enotrac UK Limited

For a change of company name of registration no. 12699543

Background

1. This is a decision on costs. The relevant background is as follows.

2. On 26 June 2020, company number 12699543 (“the primary respondent”) was incorporated with the name ENOTRAC EUROPE LTD. On 14 September 2020, Enotrac UK Limited (“the applicant”), made an application to this Tribunal under section 69 of the Companies Act 2006 (“the Act”) for a change of name of the primary respondent. The application was served on the primary respondent, which did not file a defence. On 11 January 2021, Philip Mitchell, a Director of the primary respondent, was joined to the proceedings as a co-respondent. It is accepted by the parties that no defence was filed, that the primary respondent has been dissolved and that the case should be closed. However, the applicant seeks an award of costs. A preliminary view on costs was issued on 3 June 2021, which is disputed by the respondents. The preliminary view indicated that an award of £800 to the applicant was appropriate. The matter came to be heard before me, by telephone, on 8 September 2021. Both parties were represented at the hearing, the applicant by Paul de Cordova of Jurit LLP and the respondents by Mr Mitchell.

3. At the hearing, Mr Mitchell indicated that there was evidence of emails between him and Companies House which he wished me to take into account. I allowed him until 5pm on 8 September 2021 to send copies of those emails to the Tribunal and until 5pm on 9 September 2021 for the applicant to file any submissions in response, which both parties indicated were adequate timescales. Although the material referred to by Mr Mitchell was filed late, I have read it and taken it into account, as I have the comments in response filed by Mr de Cordova. I have also taken into account all of the documents and submissions on the official file and the submissions made at the hearing.

Legislation

4. Rule 11 of the Company Names Adjudicator Rules 2008 (“the rules”) states:

The adjudicator may, at any stage in any proceedings before him under the Act, award to any party by order such costs (in Scotland, expenses) as he considers reasonable, and direct how and by what parties they are to be paid.

Decision

5. The respondents’ case appears to be that the applicant acted precipitously in launching legal proceedings and that Mr Mitchell had taken steps at Companies House to dissolve the company, of which the applicant was aware. At the hearing, Mr Mitchell said that such steps were taken as early as 24 August 2020. Mr Mitchell says that activation codes necessary to complete the dissolution process were not received by him. He says that cannot be held against him and that, when no activation codes had appeared by December 2020, he filed a hard copy of the DS01 form to dissolve the company. The applicant says that it has acted reasonably in all the circumstances and that it should be awarded its costs at the top of the scale, including the costs of the hearing.

6. The following chronology is not disputed:

26 June 2020: Company number 12699543 “ENOTRAC EUROPE LTD” is incorporated. 7 August 2020: The applicant writes, through its representatives, to the respondents, requesting that the company name be changed, in default of which proceedings to compel a name change would be brought. 18 August 2020: Mr Mitchell replies, indicating that he is willing to dissolve the company. 19 August 2020: The applicant states that it will refrain from taking legal action until 28 August 2020, when it will check the company’s status on the Companies House website. It asks for confirmation that the dissolution process has been started. 28 August 2020: The applicant writes again to Mr Mitchell, indicating that the online Companies House records show no application to dissolve and that proceedings will be launched. 31 August 2020: Mr Mitchell writes to the applicant confirming that “action has been instigated” but that he is awaiting an activation code from Companies House without which the application cannot progress. 31 August 2020: The applicant’s representatives request a copy of the WebFiling receipt from Companies House and indicate that they will take instructions regarding legal proceedings. 4 September 2020: The applicant emails Mr Mitchell and indicates that as it has received no evidence that any steps have been taken with Companies House to dissolve the company, it will launch legal proceedings.

7. I also note that the following documents have been provided:

• an acknowledgement from Companies House of Mr Mitchell’s enquiry (24 August 2020)
• an email from Mr Mitchell to Companies House, asking for an update on his enquiry (15 September 2020)
• a response from Companies House, apologising for the delay in responding (17 September 2020)
• a further email from Mr Mitchell to Companies House chasing a response (23 September 2020)
• screenshots of outgoing calls from Mr Mitchell to Companies House on 24 August 2020 and 7 September 2020

8. It is not, in my view, unreasonable of the applicant to have asked for documentary evidence of the alleged filing of the application to dissolve. I have no evidence regarding the process for dissolving a company but it is highly improbable that an online application to dissolve, which I understand carries a fee, would not be acknowledged in any form or that, the application having been made, it would not be recorded against the company details, even if only in a user area not visible to the general public. It would not have been difficult for the respondents to provide such confirmation and the tenor of the applicant’s communications is that it would have been satisfied with such documentary evidence, at least to the extent that it would not have brought immediate proceedings. In the absence of any such evidence, the applicant was being asked to accept Mr Mitchell’s word that the application had been made. I do not consider that it acted unreasonably in requiring more.

9. On the information before me, if Mr Mitchell did take formal steps with Companies House to dissolve the company before 18 December 2020, he provided no evidence of such steps to the applicant. None of the material provided to this Tribunal prior to or after the hearing clearly demonstrates that an application to dissolve was made before December 2020. There is no record of an online filing of any description. The remaining documents do not bear any reference either to the company name or company number: they simply refer to communications and enquiries. It is, therefore, entirely possible that these interactions with Companies House refer to unrelated companies or different issues: two other company numbers are visible in the screenshot of Mr Mitchell’s inbox of the email dated 15 September 2020 with Companies House, showing that the primary respondent was not the only company with which he had dealings. Even if these communications did concern the primary respondent, there is nothing to indicate that evidence of the emails and phone calls was provided to the applicant before it incurred the costs of filing the application. I would add that the final application on form DS01 to dissolve the company was made over sixteen weeks after the first attempt to dissolve the company online was apparently made on 24 August 2020. That is, by any standard, a significant delay.

10. I note that Mr Mitchell has said that there were difficulties in obtaining an activation code, which delayed the dissolution. He indicated at the hearing that this was because he cancelled the company’s postal address (this appears to have been a service address which included post forwarding) when he filed the application to dissolve and that the activation codes were not, therefore, forwarded to him. It is unfortunate that that occurred but the applicant cannot be held responsible for the failure of the respondents to maintain a functioning service address. Mr Mitchell also commented at the hearing about an alleged failure of the applicant to send correspondence not to the address of record but to his home address and by email. However, as he accepts that he received the applicant’s correspondence of 7 August 2020 and 28 August 2020, this does not appear to me to be material.

11. In short, the failure of the respondents to provide any documentary evidence that an application to dissolve the company had been made at Companies House led the applicant to file an application before this Tribunal. The applicant has been successful because the company has been dissolved. The applicant acted reasonably in the circumstances and is entitled to an award of costs.

12. The applicant requests an award at the top of the scale. I do not think that this is warranted. The CNA1 form was reasonably detailed but the attachments were very brief. I think the preliminary view awarded an appropriate amount and I maintain that decision. In respect of the hearing, the applicant has been put to expense and has been successful. The applicant says that it has expended an estimated £1230 on the hearing. I do not consider that there are aggravating factors which should result in an enhanced award: Mr Mitchell was well within his rights to challenge the preliminary view. The sum claimed is, in my view, excessive for a procedural hearing. Although within the cap indicated on the scale of costs, that scale is applicable to both procedural and substantive hearings. The hearing lasted around 25 minutes. I acknowledge that the applicant was required to provide a skeleton argument. The applicant also filed comments, albeit relatively brief, in response to the additional material provided by Mr Mitchell, which I will bear in mind in my award for the hearing. The applicant has requested costs of £870 incurred before the filing of the CNA1. However, I see no justifiable basis for awarding costs incurred outside these proceedings. Accordingly, I award costs to the applicant as follows:

Official fee: £400
Preparing and filing the application form: £400
Preparing for and attending the hearing: £500

Total: £1300

13. I order ENOTRAC EUROPE LTD and Philip Mitchell, jointly and severally, to pay Enotrac UK Limited the sum of £1300. This sum is to be paid within twenty-one days of the date of this decision.

14. Under s. 74 of the Act, an appeal lies to the court from a decision of the adjudicator to uphold or dismiss an application under s. 69. As this decision does not concern whether the application under s. 69 should be upheld or dismissed but is solely concerned with the matter of costs, there is no right of appeal against this decision. Dated this 06 October 2021

Heather Harrison
Company Names Adjudicator