Decision

Decision on Flexspace 360 UK Ltd

Published 4 September 2024

Companies Act 2006                                                                         

In the matter of application no. 4326 by Flexspace No 2 LLP for a change to the company name of FLEXSPACE 360 UK LTD, company registration no. 14094915

1. Company no. 14094915 (“the respondent”) was incorporated on 9 May 2022 with the name FLEXSPACE 360 UK LTD.

2. On 9 May 2023, Flexspace No LLP 2 (“the applicant”) filed an application to this Tribunal under section 69 of the Companies Act 2006 (“the Act”). At the time the respondent was incorporated, the nature of its business was recorded on the Companies House website under SIC code 43290 (Other construction installation). On 10 January 2024, the respondent filed accounts for a dormant company made up to 31 May 2023. The nature of the business is now shown on the Companies House website as “Dormant company”.

3. The applicant states that it is the registered proprietor of several UK and EU trade mark registrations containing the words FLEXSPACE and FLEXISPACE. These include UKTM No. 3242304 for FLEXSPACE, registered in 2018. It claims to be the UK’s leading provider of flexible offices, workshops, industrial and self-storage spaces and that it has acquired a significant reputation and goodwill, particularly in the leasing, letting and rental of office spaces and managed business units.

4. Under section 69(1)(b), the applicant claims that the company name Flexspace 360 UK Ltd is sufficiently similar to:

(i) the FLEXSPACE trade mark and name; (ii) the applicant’s registered company name; and (iii) the company and trading names Flexspace No 1 LLP, Flexspace No 2 LLP and Flexspace No 3 Limited, which it claims are the names of companies under common control with the applicant

The applicant claims that use of the respondent’s company name would be likely to mislead by suggesting a connection between the two parties.

5. The applicant requests that the Tribunal make an order under section 73(1) of the Act requiring the respondent to change its name to one that is not an offending name (within the meaning of section 73(2) of the Act) and to take all steps as are within its power to make, or facilitate the making of, that change, and not to cause or permit any steps to be taken calculated to result in another company being registered with a name that is not an offending name.

6. The applicant confirms that it contacted the respondent before making the application. It states that it informed the respondent by letter in August 2022 of its intention to issue proceedings against the company in the absence of written undertakings to change its company name. No response was received and a further letter was sent in October 2022.

7. The respondent filed a notice of defence on 20 June 2023. It states that it does not agree with any of the allegations made by the applicant and indicates that it had adopted the allegedly offending name in good faith. It is therefore relying on the defence provided for in section 69(4)(d) of the Act. The respondent claims that it did not at any point look at the applicant’s name and that when the company starts trading it would be installing automated storage systems in large distribution warehouses. Consequently, it is not in the same business as the applicant. The respondent asks the applicant to prove that its business has been affected by the registration of the company name at issue and to confirm that it is operating in a different area of business activity.

8. Only the applicant filed evidence, which I summarise later in my decision. It comes in the form of a witness statement from Thomas Richard Tyler, a member of Flexspace No. 2 LLP since May 2021, and is dated 26 September 2023. Mr Tyler confirms that he is authorised to make the statement on behalf of the applicant.

9. In these proceedings, the applicant is represented by Freeths LLP and the respondent is a litigant in person. Neither side requested a hearing and the applicant filed written submissions in lieu of a hearing on 13 March 2024.

Decision

10. Section 69 of the Act is as follows:

“(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 or elsewhere would be likely to mislead members of the public in the United Kingdom or elsewhere 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 the following may be joined as respondents-

(a) any member or person who was a member at the time at which the name was registered;

(b) any director or person who was a director at the time at which the name was registered.

(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) [Repealed]

(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) … 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.”

11. If the 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 respondent’s company name, suggesting a connection between the parties. Mere ownership of a trade mark is not sufficient. Only if this burden is discharged is it then necessary to consider if the respondent can rely upon defences under section 69(4) of the Act. The relevant date for assessing whether the applicant has goodwill is the date of application to this Tribunal: see Botanica Agriculture and Extraction Limited v Botanica Limited [2022] EWHC 2957 (Ch) at [13]-[15]. In these proceedings, that is 9 May 2023.

Goodwill

12. 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 to Lord Macnaghten’s classic definition in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217 at [224]:

What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantages 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.

13. Mr Tyler states that the companies Flexspace No 1 LLP, Flexspace No 2 LLP and Flexspace No 3 LLP have been trading under the FLEXSPACE brand since 2019. Services are currently provided throughout the United Kingdom, including in England and Wales. Mr Tyler’s witness statement includes a list of 46 towns and cities and he says that services have recently been offered in a further 4. He does not give any indication of how long each site has been active.

14. The table below shows approximate turnover figures for services provided under the name:

Year (ending 31 March)	Turnover
2023	£20.078m
2022	£19.552m
2021	£18.782m
2020	£19.447m
2019	£19.065m

15. Mr Tyler says that the applicant currently has around 2,300 customers occupying its units and that it receives on average 600 new enquiries, and takes on 50 new customers, per month.

16. Expenditure on advertising is shown in the table below:

Year	Expenditure
2023	£110,461
2022	£117,059
2021	£190,027

17. He does not explain what this money was spent on, although earlier in the witness statement he says that the applicant uses social media channels to promote its services.

18. Mr Tyler’s witness statement is accompanied by the following exhibits:

• Exhibit TRT1, containing details from the Intellectual Property Office website of UK Trade Mark (“UKTM”) Nos. 915865521, 2472087, 324304, all owned by the applicant and registered for services relating to the rental and leasing of office space, industrial premises, workshops, meeting rooms, and warehouse space. They are shown below:

The filing dates of the marks are 1 November 2016, 13 November 2007 and 7 July 2017 respectively. The same exhibit contains details of UKTM Nos. 3207947 and 3060278, both owned by the applicant and registered for services relating to the storage of goods and the rental of storage facilities. They are shown below:

The filing dates of these marks are 20 January 2017 and 17 June 2014 respectively;

• Exhibit TRT2, containing the overview information from the Companies House website for Flexspace No 1 LLP, Flexspace No 2 LLP and Flexspace No 3 LLP. I note that all these entities share a registered office address;
• Exhibit TRT3, containing an application form for rental of property (the form refers to “Rent Commencement Date” and “tenancy agreements”). The word “FLEXSPACE” appears as shown in UKTM No. 915865521, with the additional wording “BUSINESS UNITS ON FLEXIBLE TERMS”. The form is marked as Version 3, with a date of 15 June 2023. The exhibit also contains a single invoice, with the word “FLEXSPACE” in the same style as on the form. The invoice is for £597.86 and relates to the licence fee for a unit, site charge and insurance for the month of January 2021. At the bottom of the invoice, it states that it has been issued “on behalf of Flexspace No 1 LLP”;
• Exhibit TRT4, containing two screenshots from the applicant’s website, and a single screenshot from each of Facebook, Instagram and LinkedIn. These were all captured on 25 September 2023 and have no other dates;
• Exhibit TRT5, containing 6 photographs showing sites in Bellshill, Blackpool, Darlington, Ludlow, Shrewsbury and Milton Keynes. The name FLEXSPACE is shown on the signage, either as a single word or spread over two lines. All the photographs are undated. I have reproduced two examples below:

19. I have two difficulties with this evidence. First, Mr Tyler does not explain the corporate structure of the applicant, in particular its relationship with Flexspace No 1 LLP and Flexspace No 3 LLP. I note that the applicant claims in response to Question 13 on the Form CNA1 that the companies are under common control, and it repeats this assertion at [9.2] of its written submissions in lieu of a hearing. However, these claims are not given in evidence. Although the Form CNA1 contains a statement of truth, it has not been signed by an individual, but rather a firm. Secondly, the majority of the evidence showing how the name FLEXSPACE is used in a public-facing context is undated. I shall deal with this second point first.

20. The only documentary evidence that shows how the name was used on or before the relevant date is a single invoice covering the month of January 2021. I acknowledge that the trade marks were all filed and registered before the relevant date. However, registration of a trade mark does not show that it is being used in the market, and goodwill or other reputation cannot be established without use. I need to add to this the unchallenged narrative evidence of Mr Tyler. At [8] he states that all three LLPs have been trading under the FLEXSPACE brand since 2019; at [9], he lists the towns and cities in which services are provided under the FLEXSPACE name (although he does not give any dates here); at a second [8], he gives turnover figures for services provided under the FLEXSPACE name; and in [13], he gives figures for the sums spent on promoting the FLEXSPACE name. He does not explicitly say what services have been provided, but again I have the invoice evidence of rental and associated services and the use of the explanatory line “BUSINESS UNITS ON FLEXIBLE TERMS” with the brand name. At the second [9], he refers to customers “occupying the Applicant’s units”. (There is some double numbering of the paragraphs in the witness statement.)

21. The standard of proof that applies in these proceedings is the civil standard, i.e. that the facts must be proven on a balance of probabilities. I find that it is probable that the name FLEXSPACE has been used in connection with rental services for office space and industrial units since 2019. Annual turnover figures have been within the range of £18.782m to £20.078m. I note that at the time of writing the witness statement, the number of customers was 2,300, but that Mr Tyler states that an average of 50 new lettings are taken on each month. The date of the witness statement is 4-5 months after the relevant date in these proceedings. Even if all the new lettings were from new customers, I consider that a large proportion of those 2,300 are likely to have been customers at the relevant date. Taking the evidence as a whole, I find that there was goodwill associated with the name FLEXSPACE.

22. I return now to the question of the corporate structure. I infer from Mr Tyler’s witness statement that the turnover has been generated by the activities of all three entities, including the applicant. The ownership of any goodwill is not clear. I note that the applicant is the registered proprietor of all the trade marks listed in Exhibit TRT1, but in the absence of any licences I cannot say whether it is also the owner of any associated goodwill. However, I do not find it necessary to decide whether the applicant is the sole owner of the goodwill generated through use of the FLEXSPACE name. This is because it is sufficient for the purposes of section 69(1)(a) of the Act to show that the applicant has goodwill in the names and “goodwill” may, as stated in section 69(7), include reputation of any description. For present purposes, I am prepared to accept that the applicant has at least a share in the goodwill in this broader sense generated in the UK since 2019 under the name it relies on.

The parties’ names

23. Section 69(1)(b) requires that the names at issue must be sufficiently similar to one another that the use in the United Kingdom or elsewhere of the contested company name would be likely to mislead members of the public by suggesting a connection between the parties. The names at issue in the present case are FLEXSPACE (the applicant) and FLEXSPACE 360 UK LTD (the respondent).

24. The words “UK” and “LTD” would be perceived as indicative of the geographical location and corporate status of the company respectively, and so these elements of the company name do not have a bearing upon the comparison that I have to make, which is between FLEXSPACE and FLEXSPACE 360. The figure “360” is a point of difference between the two names. However, the first word in the respondent’s name is identical to the name the applicant is relying on and it is this that will attract the greater degree of attention from the public. It is also an invented word, created by the juxtaposition of two words that are known to the public. I find that it is sufficiently similar that the use of the respondent’s name in the UK or elsewhere would be likely to mislead members of the public in the UK or elsewhere by suggesting a connection between the respondent and the applicant.

The respondent’s defence

25. The only defence pleaded is that of good faith under section 69(4)(d) of the Act. The onus is on the respondent to show that the contested name was adopted in good faith. Section 69(4)(d) reverses the usual persuasive and evidential burden in civil law cases where good faith will normally be presumed and bad faith must be proven by the person alleging it. Once the respondent establishes a prima facie case that the name was adopted in good faith, it is for the applicant to rebut it. The relevant date for assessing the defence is the date on which the name was adopted, in this case the date of incorporation, i.e. 9 May 2022.

26. The following principles in relation to good faith can be extracted from the judgments of the Privy Council in Barlow Clowes v Eurotrust International Ltd [2005] UKPC 37 and the Court of Appeal in England and Wales in Niru Battery Manufacturing v Milestone Trading Ltd [2003] EWCA Civ 1446:

a) Good faith is not displayed by a failure to act in a commercially acceptable way or by certain kinds of sharp practice which fall short of outright dishonesty or by dishonesty itself: see Niru Battery at [164];

b) There is a combined subjective/objective approach to the honesty of a party’s behaviour. This involves (i) a consideration of what the party knew at the time of a transaction and (ii) how that party’s action would be viewed by applying normally acceptable standards of commercial behaviour: Barlow Clowes at [15] to [18] and [28] to [32].

27. The respondent’s Form CNA2 has been signed by Darren Troth. He claims that:

I acted in good faith when applying for the Flexspace name. I did not at any point look at the Flexspace name referred to in the letter. Flexspace 360 UK is a dormant company at the moment. When it does start to trade, its activity would be to install automated storage systems in big distribution warehouses and is by no means the same as the Flexspace Ltd, Flexspace No1 LLP, Flexspace No2 LLP and Flexspace No3 LTD.

28. He also says:

I would like the applicant to prove that their business has been affected by my dormant company, and also to confirm that their business activity is not the same as Flexspace 360 Ltd.

I am unable to admit any of the allegations mentioned as I have acted in good faith and do not feel that I have done anything wrong.”

29. On the CNA2, the respondent had the opportunity to tick a box to rely on a defence that the interests of the applicant are not adversely affected to any significant extent by the contested company name. It did not do so, and so I do not need to take account of the absence of such evidence from the respondent. The fact that the intended activity of the respondent is claimed to be different from that of the applicant is also not relevant to my decision. This is because a company can change the actual or designated nature of its business.

30. Mr Troth has given no account of how he chose the name for the respondent. As I have already mentioned, the effect of section 69(4)(d) is that the burden of proof is on the respondent to show that it has acted in good faith. Mr Troth asserts that he was acting in good faith, but has not provided any evidence to support this assertion. Consequently, I must find that the respondent cannot rely on this defence.

Outcome

31. The defence based upon section 69(4)(d) of the Act fails and the application succeeds.

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

(a) Flexspace 360 UK LTD shall change its name within one month of the date of this order to one that is not an offending name;

(b) Flexspace 360 UK LTD shall:

(i) take such steps as are within its power to make, or facilitate the making, of that change;

(ii) 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.

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, the Company Names Tribunal 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. The respondent has 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, in accordance with the scale published at paragraph 10.1 of the Tribunal’s practice direction. The award has been calculated as follows:

£300 for preparing a statement and considering the other side’s statement
£500 for preparing evidence
£100 for preparing written submissions in lieu of a hearing
£400 for official costs (CNA1)
£150 for official costs (CNA3)

£1450 in total

37. I therefore order Flexspace 360 UK LTD to pay Flexspace No 2 LLP the sum of £1450. This sum is to be paid within 21 days of the period allowed for appeal or, if there is an appeal, within 21 days of the conclusion of the appeal proceedings (subject to any order of the appellate tribunal).

Appeal

38. 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 separate right of appeal in relation to costs.

39. Any notice of appeal 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.

40. The Tribunal must be advised if an appeal is lodged so that implementation of the order is suspended.

Dated 30 August 2024

Clare Boucher
Company Names Adjudicator