Decision

Decision on Hampton Preservation & Maintenance Services Limited

Published 26 March 2021

Companies Act 2006

In the matter of application No. 1892 by Hampton Timber Specialists (Dundee) Limited for a change to the company name of Hampton Preservation & Maintenance Services Ltd, company registration SC 528226

1. Company SC 528226 (“the primary respondent”) was incorporated on 29 February 2016 with the name Hampton Timber Services Ltd. On 29 March 2016, the name was changed to Hampton Preservation & Maintenance Services Ltd. On 3 December 2018, Hampton Timber Specialists (Dundee) Limited (“the applicant”), filed an application to this Tribunal on Form CNA1 under section 69 of the Companies Act 2006 (“the Act”). The Form was amended on 21 December 2018 and the amended Form was signed by Lisa Anne Hampton (hereafter “LAH”). The applicant asks the Tribunal:

To compel Hampton Preservation to change its name to one that includes no reference to the words “Hampton”, “Hampton’s”, “Hamptons” or “Hampton Timber.

2. Of the name change which took place on 29 March 2016, the applicant states:

The company was initially set up in 2015 as Hampton Timber Services Ltd and we made a complaint to Companies House at that time on a “too like” basis and they were instructed to change the name. It was then changed to Hampton Preservation and Maintenance Services Ltd. It was implied at the time that we could not ask him not to use “Hampton” in the company name given that it is also his surname. However, we feel that allowing the name “Hampton” to be used to represent a Timber Preservation business within the same geographical area as ourselves is enabling him to pass himself off as Hampton Timber Specialists Ltd and mislead the public into thinking he has the knowledge, experience and reputation built by Mike Hampton of Hampton Timber Specialists, since 1987.

3. 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.

4. At the request of the applicant, the primary respondent’s sole director, Christopher James Hampton (hereafter “CJH”) was joined to the proceedings under the provisions of section 69(3) of the Act. CJH was given notice of this request and an opportunity to comment or to object. The Tribunal received no comments or objections and he was joined to the proceedings as a co-respondent on 22 January 2020.

5. The applicant states that the names associated with it are “Hampton”, “Hampton Timber”, “Hampton’s” and “Hamptons”. It states that these names are:

…synonymous with high quality timber preservation services in the city of Dundee and the wider Tayside area of Scotland. This towering reputation as the foremost timber specialists within this area has been built up painstakingly over a period of in excess of thirty years, to the point that professional clients such as solicitors, chartered surveyors and property letting agents located in the Tayside area recognise Hampton Timber Specialists (Dundee) Limited as the “go-to” firm for timber maintenance and preservation reports and repairs.

6. The applicant states that that the field of business in which the names upon which it relies have goodwill/reputation are:

Timber preservation and maintenance, and joinery, including repair works and reports on properties in relation to the following: identification and treatment of dry rot, wet rot, woodwork, damp proofing, condensation control and basement tanking.

7. The applicant explains that it objects to the company name because it is:

…generating confusion in the eyes of the public, including regular clients of [the applicant]. For example, repeat clients of [the applicant], who have the bank details of [the applicant] stored in their administrative systems have paid [the applicant] directly for work done and invoiced by [the primary respondent]: such is the extent of the confusion that these clients had mistakenly instructed [the primary respondent] to undertake repairs thinking that they had in fact engaged [the applicant] to do so. The end result was that they paid [the applicant] in error. Other examples of [the primary respondent] free-riding on the goodwill, reputation, high quality expertise and workmanship of [the applicant] include the director of the [primary respondent] actively soliciting the clients of [the applicant] and [the primary respondent’s] adoption of a logo that is almost identical to [that of the applicant], deliberately or recklessly to instil confusion amongst [the applicant’s] clients. The [applicant has] also received communications from property letting agents accepting quotes for works that they believed had originated from [the applicant], when in fact they had been prepared by [the primary respondent]. In conclusion, there is sufficient evidence for the claim that two companies operating in exactly the same field in a limited geographical area with almost identical, or similar names is a source of public confusion, which [the primary respondent] are taking no steps to dislodge, and is to their commercial benefit. The [primary respondent] are also stoking up the situation to enable themselves to benefit from the goodwill and reputation developed by [the applicant].

8. The applicant indicates that it is claiming its costs and in response to question 7 on the Form CNA1 which reads:

Did you warn the company that if it did not change its name that you would start legal proceedings against it? If “yes”, when did you warn the company?,

the applicant points to their complaint to Companies House mentioned in paragraph 2 above. Attached to the Form CNA1 are a range of documents filed in support of the applicant’s complaint; we shall return to this point later in this decision.

9. Having scrutinised the Form CNA1, on 19 February 2019, an Adjudicator wrote to the parties stating that it “appears to show that the respondent is operating.” The letter goes on to explain that there:

is nothing to suggest in your application, nor in the evidence filed, that the main purpose of the respondent in registering the name was “to obtain money (or other consideration) from the applicant or prevent him from registering the name.

10. Having further explained that applications to this Tribunal are “neither an alternative nor an equivalent to an action for infringement or passing off”, the Adjudicator concluded that unless the applicant can show that section 69(5) of the Act applies, the application has “no reasonable prospect of success and is misconceived.” The Adjudicator indicated she was “minded to strike out the application.” The applicant was allowed until 5 March 2019 to request a hearing. On 5 March 2019, the applicant filed Form CNA4 and fee and requested a hearing.

11. That hearing was scheduled to take place, by telephone, on 26 March 2019, but was rescheduled to 4 April 2019. In her letter to the parties dated 12 April 2019, the Adjudicator stated:

The content of the application and the attachments mean that the applicant has, effectively, provided the company with a defence under section 69(4)(b)(i) of the Companies Act 2006 because it is operating. The application will fail unless the applicant can show that the main purpose of the company in registering the name was to obtain money (or other consideration) from the applicant or prevent the applicant from registering the company name (section 69(5)). The applicant takes issue with the Tribunal’s interpretation of “other consideration”, citing the original purpose for, and background to, the legislation.

I have decided to allow the application to be served upon the primary respondent and to let the case run because there has been only one decision which has turned upon the interpretation of section 69(5) of the Act: BL O/193/14 Michael Timon and Redcroft Fire Ltd v Timon Fire Protection Limited. However, the Tribunal will expect submissions by the parties on the approach adopted by the adjudicators in Timon and how it influences (or not) this case. The applicant should bear in mind that if the application ultimately fails, the respondent will be entitled to an award of costs for the trouble of defending the company name.

12. The primary respondent filed a notice of defence (signed by CJH). The primary respondent states that contrary to the position outlined by the applicant, the name was not changed as a result of a complaint to Companies House, but rather in response to a letter of 9 March 2016 from Brymer Legal. The primary respondent states:

The applicant is also called upon to explain why they did not object at the time to the present name of the respondent…The respondent would suggest that the applicant must have been well aware of the change of name and yet did nothing to challenge this or raise any concern over the next 3 years. …The respondent obviously bears the name of its Principal Director and yet the applicant accepted this for nearly 3 years.

13. The primary respondent challenges the applicant’s claim to a “towering reputation” and being the “go-to” firm for timber maintenance and preservation reports and repairs. It makes the following points:

• the previous company operated by the applicant’s principal director, Michael John Hampton [hereafter “MJH”] was known as Hampton Timber Specialists Limited. This company was wound up by Dundee Sheriff Court on 15 April 2014, with substantial debts;

• the applicant has only been trading for “shortly over 5 years”;

• the applicant has no more than 3 employees and “is not in any way shape or form the largest timber preservation company operating in the Tayside area”;

• that prior to the filing of the application, the primary respondent received no request from the applicant or their agent “to desist from using the name “Hampton” or a request to change the name in any way, shape or form”;

• the primary respondent “absolutely denies that they have acted in any way “to instil confusion amongst Hampton Timbers clients”;

• the applicant’s argument that its “business is synonymous with the good name and reputation of one of its directors namely [MJH] is also somewhat misleading as [MJH] was only appointed a director of the applicant on 30 November 2018.”

14. Also attached to the Notice of Defence are what the primary respondent explains are “the direct observations of the principal director of the respondent” i.e. CJH.

15. In its Notice of Defence, the primary respondent indicates that it is relying upon defences based upon sections 69(4)(b), (c), (d) and (e) of the Act. It further indicates that it is claiming its costs.

16. In these proceedings, the applicant is represented by Brymer Legal Limited and the primary and co-respondent by Muir, Myles, Laverty, Solicitors. Although only the applicant filed evidence during the evidence rounds, on 17 September 2020, the primary respondent filed written submissions in reply to the applicant’s evidence/submissions. In an official letter to the parties dated 14 January 2021, the Tribunal stated:

…the adjudicators will take into account the contents of the attachments to the forms CNA1 and CNA2 as admissible evidence. All other documentation will be taken into account by the panel insofar as it contains legal submissions, rather than evidence of fact…

17. The parties were asked if they wanted a decision to be made following a hearing or from the papers. Neither party requested a hearing, nor did they elect to file written submissions in lieu of attendance.

18. 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 defences under section 69(4) of the Act.

Evidence - the applicant’s goodwill/reputation

19. In addition to the evidence mentioned in paragraph 16 above, the applicant’s evidence/submissions consists of the following affidavits: LAH and MJH dated 6 March 2020 (accompanied by the same four attachments), Professor Stewart Brymer OBE dated 20 May 2020 (accompanied by an “Inventory of Productions”), Duncan W.H. Robertson dated 24 February 2020 (which appears to be incomplete), Paul D Letley of Pavillion Properties dated 13 February 2020 and Adam Hutcheson dated 2 March 2020. It also provided written submissions from Brymer Legal dated 13 March 2020.

20. Although we have read all the evidence, for reasons which will become clear, we do not need to summarise it here. In its submissions, the applicant states:

It is not disputed that the original company formed by [MJH] went into liquidation following an administrative payment issue with HMRC. That has little, or no, impact on the goodwill and reputation of the applicant however in the field of timber preservation works in the city of Dundee and the broader Tayside Region. It is of particular importance to note that the applicant is honouring the guarantees issued by the original trading company.

21. In its written submissions, the primary respondent characterises the applicant as a “phoenix” company and states:

3m) It is difficult to accept that the applicant phoenix company enjoys any goodwill or a good reputation…

22. While we note the primary respondent’s concerns regarding the circumstances surrounding the winding-up of Hampton Timber Specialists Limited and the incorporation of the applicant, we also note that in its Form CNA2 dated 9 May 2019, it states that the applicant “has only been trading for shortly over five years” i.e. the primary respondent appears to accept that by the relevant date in these proceedings i.e. 29 March 2016 (i.e. the date the primary respondent changed its name to Hampton Preservation & Maintenance Services Ltd), the applicant had been trading for a little under two years.

23. In relation to establishing a goodwill/reputation, this Tribunal routinely looks for guidance to case law developed in trade mark proceedings. In such proceedings, it is well-established that goodwill of more than a trivial nature, even if it is small, is capable of protection (Stacey v 2020 Communications [1991] FSR 49 refers). In the interests of procedural economy, we shall proceed on the basis most favourable to the applicant i.e., that at the material date it had the necessary goodwill in the names relied upon to get its objection off the ground.

Similarity of names

24. The other initial burden facing the applicant is that the company name is “the same as” or “sufficiently similar to” “Hampton”, “Hampton Timber”, “Hampton’s” and “Hamptons” to suggest a connection between the company and the applicant. The company’s name is Hampton Preservation & Maintenance Services Ltd. The names relied upon by the applicant consist of the word “Hampton” either alone or accompanied by an additional letter “s” (with or without an apostrophe) or by the descriptive word “Timber”, whereas in addition to the word “Hampton”, the primary respondent’s name includes the descriptive words “Preservation & Maintenance Services” and the designation “Ltd.” As the inclusion of the words “Preservation & Maintenance Services” and “Ltd” in the primary respondent’s name describe the nature of the primary respondent’s area of business and its legal status respectively, these words are not distinctive or, in the case of “Ltd”, relevant to the similarity of the names.

25. Although the primary respondent’s name includes the surname “Hampton” as its first component and notwithstanding that the words “Preservation & Maintenance Services” are descriptive in nature, considered as a totality, the primary respondent’s name is not, in our view, to be regarded as “the same” as the names upon which the applicant relies. However, the presence in both parties’ names of the surname “Hampton” is enough for the primary respondent’s name to be regarded as “sufficiently similar” to the names upon which the applicant relies and in connection with which it has generated goodwill such that its use in the UK would be likely to mislead by suggesting a connection between the primary respondent and the applicant. As the ground specified in subsection 69(1)(b) is established, the onus switches to the primary respondent to establish whether it can rely on any of the defences pleaded in the Notice of defence.

26. Before we turn to the defences relied upon, a chronology of events is, we think, likely to assist in understanding the relationship between the various companies and individuals involved in this dispute.

Chronology

27. We begin by noting that in his affidavit, dated 6 March 2020, MJH explains that the delay in taking action against the primary respondent’s new company name was because he:

…did not want to cause any further aggravation between myself and my brother (the respondent’s father) and therefore the decision was made to let things run as they were in the hope that the ongoing confusion between the two companies would dissipate. This has unfortunately not been the case and we are continually required to explain the situation which is a constant source of embarrassment to us…

28. The key events appear to us to be as follows:

25 January 1988 - Worldremote Limited (no. SC108868) incorporated;

11 March 1998 - Worldremote Limited changes its name to Hampton Timber Specialists Limited;

1 April 2014 - Hampton Building Services Limited (no. SC473980) incorporated;15 April 2014 - Hampton Timber Specialists Limited wound up; Directors included LAH and MJH; CJH was not a director;

10 December 2014 - Hampton Building Services Limited changes its name to Hampton Timber Specialists (Dundee) Limited; Directors include LAH and MJH;

5 August 2015 - CJH appointed as a director of Hampton Timber Specialists (Dundee) Limited;

18 February 2016 - CJH resigns as a director of Hampton Timber Specialists (Dundee) Limited;

29 February 2016 - MJH writes to CJH accepting his resignation from the applicant, reminding him he is bound by “[his] implied terms of condition of employment in which [he] must ensure that [he] does not do anything to jeopardise the on-going commercial activity of Hampton’s” and asking him to, inter alia, delete the account hamptontimber@hotmail.com;

29 February 2016 - Hampton Timber Services Ltd (no. SC528226) incorporated; CJH is the only director;

4 March 2016 - applicant writes to Companies House complaining that the primary respondent’s name i.e. Hampton Timber Services Ltd is “too like” its own;

9 March 2016 - Brymer Legal send a letter to CJH asking him to, inter alia, “cease and desist in passing yourself off as the [applicant]”;

29 March 2016 - Hampton Timber Services Ltd changes its name to Hampton Preservation & Maintenance Services Ltd;

3 December 2018 - complaint filed to the Tribunal.

Defences

29. The statutory defences under section 69(4) are set out at the beginning of this decision. The primary respondent is relying upon a number of defences, the first of which is:

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

30. As one can see, the above defence is subject to section 69(5) of the Act which reads: > (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.

31. In its written submissions dated 13 March 2020, the applicant states it:

…accepts that the respondent is currently trading. As such, the respondent has a defence under section 69(4)(b)(i)…and the issue…to decide upon therefore is the proper interpretation of section 69(5) of the 2006 Act.

Section 69(5) of the Act – case law

32. In its decision in Barloworld Handling Ltd (BL-O-127-09), this Tribunal stated:

“7. BHL has stated in its application that “this new company is marketing similar products to us using the Unilift name”. This is a statement that USW was operating under the name at the time of the application, which is a defence to the application under section 69(4)(b)(i) of the Act. Under the provisions of section 69(5), however, even if it is shown that the company is operating under the name, this defence may be insufficient to defeat the application if the applicant shows that the main purpose of the respondent in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name.

8. BHL has provided no indication either in its application or in any response to the adjudicator’s letter of 6 April 2009 that it has grounds under section 69(5) to thwart USW’s defence under section 69(4)(b)(i). It has made no request to be heard in relation to the preliminary view to strike out the application. Furthermore, it has made reference to passing-off. As stated in the adjudicator’s letter, applications to the Company Names Adjudicator are neither an alternative nor an equivalent to an action for passing-off. ‘Passing-off’ indicates a trading activity and thereby constitutes a defence to the application under section 69(4)(b)(i) which has not been countered by any indication under section 69(5) that the registration was opportunistic on the part of USW.”

33. In Timon Fire Protection Limited (BL-O-193-14) the Tribunal considered section 69(5) of the Act again. In that case, which was defended, evidence was filed and the parties represented by counsel at a hearing in which cross-examination took place. The Tribunal stated:

“22. There are two limbs to section 69(5): the first is that the main purpose of the respondent in registering the name was to obtain money (or other consideration). The second, alternative, limb is that the main purpose of the respondent in registering the name was to prevent the applicant from registering the name.

23. We feel that it is important to emphasise that the wording of section 69(5) refers to the main purpose of the respondent in registering the name. This has to be the actual or primary motive behind the decision to register the company name, not a by-product or effect of registration. The effect of any company name registration is that it blocks the registration of a name the same as or too like the company name. The effect of blocking does not mean that blocking was the main purpose…

25. In relation to the first limb, that the main purpose of the respondent in registering the name was to obtain money (or other consideration) from the applicants (either of them), it is accepted by the applicants that neither the respondent, [nor P or S], have ever sought money from them. In reply to Miss McFarland’s submissions about the meaning of “other consideration”, Mr Wright submitted:

In my submission, the meaning of the Act is quite clear. It is a circumstance - I think the Tribunal referred to it earlier - where you know a company is going to want to register a name, you register it first and then you seek to charge an extortionate or inflated price for it. The only reason “(or other consideration)” is included in the Act - this is in the wording of the Act in sub-section (5) - is to cover someone not going to the company and saying, “I have registered this name” and not demanding money but wanting something else, be it goods or whatever. There are all sorts of things that one might demand rather than money, and that is the mischief that the Act is intending to cover, not incidental benefits or indirect benefits that might be achieved by registering the name.

…

…even if the only reason that [P] and his business, Timon Fire, had managed to build up the amount of orders they have is because thought that they were going to [M], that would not be enough to satisfy this part of the Act. It is quite clear that through the wording the registering of the name was to obtain money from the applicant, so it has to be something that you get directly from the applicant. That cannot be something that affects the goodwill or an infringement of the trade mark, which is what my learned friend is relying on.

26. We agree with this submission. Section 69 of the Act is intended to provide redress against opportunistic company name registrations, or in simpler language, company name squatting, i.e. holding a company name in order to extract consideration from a party with a trading interest in that name or to prevent registration. It was not intended to replace, or provide an alternative to, passing-off or trade mark infringement proceedings, where the alleged benefits to a defendant accord more closely with Miss McFarland’s interpretation of “other consideration”. Section 69 refers to the obtaining of money, with other consideration following in brackets. The brackets indicate that ‘other consideration’ is something similar to money, as submitted by Mr Wright: for example goods, or property. It does not cover placing oneself in the position of a licensee, obtaining unfair advantage, or passing off one’s goods or services as those of another trader.”

The applicant’s position in relation to section 69(5) of the Act

34. In its written submission, the applicant states that the Tribunal’s approach to section 69(5) of the Act is “overly narrow, unjustified and illogical.” Given the significance of these submissions to the matter we have to decide, the applicant’s submissions are reproduced below verbatim:

“1. It is unduly narrow because the natural meaning of the words of section 69(5) is sufficiently broad to justify the applicant’s construction that the words “other consideration” is habile to include direct gain or benefit to the respondent which is not necessarily monetary in nature, but which may consist of value such as the respondent putting itself in a position where it can approach and deal with the applicant’s clients and customers because of the established reputation of the applicant in the names “Hampton”, “Hamptons” and “Hampton Timber.” This is in the sense of the respondent having an advantage not normally available to a new company without a reputation of its own. When the respondent’s company was established, it had no experience in the specialist market of dry rot, wet rot and woodworm treatment. The only experience which the respondent’s founder [CJH] had was as a result of him having worked for the applicant with a view to him taking over of the applicant’s business. That hope did not materialise.

It is argued that if Parliament had intended the meaning of section 69(5) to be limited to a respondent directly obtaining money or some other consideration from an applicant, then it could have easily inserted the word “directly” between the words “was” and “to.” The fact that Parliament failed to do so speaks volumes and on its face, the statutory language does not discount the possibility that the respondent may be deriving value, gain or consideration from the applicant indirectly by or through the respondent’s use of the company name. That, it is submitted, is consistent with the canons of construction and interpretation by the courts.

2. The interpretation is unjustified, since it leads to injustice in light of the original purpose of the Company Law Review Steering Group and Parliament in recommending, and enacting, the establishment of the Company Names Tribunal and CAN (sic) [Company Names Adjudicator]

With respect, the CNA’s construction represents a protective gap in the statutory scheme, particularly in light of its broader purpose, which is to ensure that the CNA has the power to instruct a respondent to change a registered name “if it was chosen to exploit [an applicant’s] reputation or goodwill” or where “it is either the same as one in which the objector has goodwill or [is] so similar to such a name as to be likely to mislead by suggesting a connection between the objector and the company.” It is argued that these quotations from the UK government’s White Paper and the Consultation which led to the creation of the Company Names Tribunal are particularly relevant and place 69(5) in its proper context and thus help establish the “background factual matrix” (as described by Lord Hoffman on many occasions) to the statutory purpose of this provision. It is acknowledged that legislation must be interpreted within the body of a statute but, on occasion, it is perfectly proper for recourse to be had to the underlying body of research which led to the enactment of the legislation in question. There are examples in decided case law where the Court has seen fit to place the legislation in the context of the Governmental White Papers and Consultation Papers that preceded the enactment of same. It is submitted that this is appropriate in this case.

3. Finally, the interpretation is illogical, since if it is correct that section 69 is solely intended to provide redress against opportunistic company name registrations [i.e.]…company name squatting where such unscrupulous companies seek to extract cash from existing companies with goodwill or a reputation, then it could have simply outlawed such activities in section 69 without also including the condition in section 69(4)(b)(i) that a respondent must be actually trading. Another way of articulating the same point is that it makes no sense for a respondent to be required to actually be engaging in trading under the registered company name if its sole purpose is to directly extract cash or some other consideration from the applicant i.e. why should a respondent have to bother trading? Counsel for the successful party in Timon focused on cyber-squatting and like as examples where direct financial benefit was being sought. The Tribunal did not receive a compelling counter-argument such as that argued in this submission and accordingly found in favour of the respondent in that case. This is an important point of distinction between that case and the facts here.

It is submitted that the more logical interpretation of section 69 of the 2006 Act is that Parliament intended that once it has been established that a respondent has been trading and thus may avail itself of the defence under section 69(4)(b)(i) of the 2006 Act, it will nevertheless be liable if it has registered a company name and engaged in trading, where such trading is necessary either to enable the respondent to approach the applicant directly to obtain money from him/her/it, or to obtain or derive some gain or benefit (which can be converted into monetary value) indirectly from the applicant by trading on the back of the latter’s goodwill. This is precisely what has happened in this case.

It is submitted that the three arguments above are of such a compelling nature that the decision of the CNA in [Timon] should not be followed.”

35. In its written submission, the applicant further states:

…there is an abundance of evidence of the respondent indirectly obtaining benefit, consideration, value or gain from the applicant…

And:

“2. It is accepted that there are existing remedies of trade mark infringement and passing off which may be open to the applicant. These remedies and the Order sought from the CNA are not, however, mutually exclusive and it is submitted that there is no decided case law to the effect that an action brought under the 2006 Act cannot succeed by reason of the fact that there (sic) other remedies available to an applicant…nowhere in the 2006 Act is it stated that this is the case…Parliament could have simply outlawed such activities in section 69 without also including the condition in section 69(4)(b)(i) that a respondent must be actually trading.

3…

4. By way of final comment, it is submitted that allowing the respondent/[CJH] to use the Hampton name to trade in the same sector and geographical area will ultimately mean that if a time were ever to come when the applicant would consider putting its business up for sale, it is possible that the company name might hold very little value given there is a competitor using a very similar name. It is argued that this would also constitute financial gain on the respondent’s part.

As such, the crux of the applicant’s argument is that (i) if the Parliamentary intention behind section 69 was to prevent cyber-squatting on company names, then there would be no sense in inserting the proviso in section 69(4) that the respondent must be trading, which suggests that the proper interpretation is that the extraction of “indirect” benefit, gain or consideration by a respondent is indeed covered under section 69(5); and (ii) although the policy position of the CNA may be to prevent any interpretation of section 69 that would provide an applicant with an alternative (to the comparatively more expensive) common law action of passing-off in the courts, that policy (assuming it exists) must give way to the interpretation of plain words of the statute).

The primary respondent’s response in relation to section 69(5)

36. In its submissions, the primary respondent states:

“1. The primary submission or argument of the Applicant appears to be that Section 69(5) of the 2006 Act is “overly narrow, unjustified and illogical”.

The Applicant in the second paragraph of the first submission speculates as to the intention of Parliament when it drafted Section 69(5) and the general thrust appears to be that Parliament failed to consider various relevant factors.

The Respondent’s response to this is:-

The wording of the relevant section is clear and concise and as the Applicant suggests, it would have been easy to insert words such as “directly”. However, Parliament chose not to make these additions and alterations. It is difficult to imagine that the matters which the Applicant raises were not considered debated and subsequently omitted by Parliament.

Perhaps more tellingly, the statutory provision contained in Section 69(5) and the judicial interpretation thereof have been extant since 2009. If indeed the wording of the statute and the judicial interpretation of the statute lead to the “injustice” which the Applicant argues is the case, it seems remarkable that the decision in Barloworld Handling Limited has stood since 2009. The suggestion that the reason that Barloworld has stood so long is because there has never been presented such a compelling case as the present one is obviously misconceived as the Applicant cannot possibly know what previous similar applications have been made and rejected.

It is therefore obvious that had Parliament wished to widen the scope of the section, it would have been easy to add the proposition that a company may be “deriving value, gain or consideration” but the fact of the matter is that these words do not appear in the statute and neither are they introduced into judicial consideration of a defence under the statute/section. In short, it is all wishful thinking on the part of the Applicant and there are no arguments presented which should induce the Tribunal into even consideration introducing a fresh interpretation of Section 69(5).

2. The second argument advanced by the Applicant appears to be a rehash of the first argument. The writer is uncertain as to what the “protective gap” supposedly is.

It is accepted by the Applicant’s agent that “it is acknowledged that legislation must be interpreted within the body of a statute”. It appears to the writer that this is the fact of the matter and a concise statement of how the Company Names Tribunal operates. The Company Names Tribunal is necessarily bound by the terms of the Statutes which it interprets. In the case of Section 69(5) the terms of this section are admirably concise and clear. The interpretation has stood since 2009 and again it is submitted there are insufficient reasons advanced by the Applicant to make any change.

3. Again, this is largely a rehash of the previous two arguments but this time the proposition is that “the interpretation is illogical”. This argument appears somewhat in contradiction to the argument advanced in the second paragraph where it is accepted that “legislation must be interpreted within the body of a statute”. It would therefore appear to the writer to be perfectly logical for the Company Names Tribunal to disregard concepts of “indirectly obtaining benefit, value or gain, goodwill and reputation” when these matters are not mentioned in the statute/section and judicial interpretation for over 10 years has confirmed that these matters should not be taken into account.

Therefore, the position of the Respondent is that the interpretation is anything but illogical, indeed it is perfectly logical and correct.

The Applicant suggests that they have presented a “compelling argument” but the response of the Respondent would be that the essence of the argument presented is that the statute is “unfair”. The fact that the Applicant finds the terms of Section 69(5) unfair is not, with the greatest respect, a “compelling argument.”

The Applicant goes on to present “Evidence of the Respondent indirectly obtaining benefit, value of gain from the Applicant’s Goodwill and Reputation.”

This evidence is in the submission of the Applicant wholly irrelevant given the terms of section 69(5). It is clear from the terms of the said section and clear from judicial interpretation of the said section that the evidence which is presented in this particular section does not assist as to whether or not the Respondent’s “main purpose in registering the company name was to (a) obtain money or other consideration from the Applicant or (b) prevent the Applicant from registering the name in the sense of the registration of the company name by the Respondent being opportunistic. The matters which are presented by the Applicant should not be considered by the Tribunal and should be wholly disregarded as irrelevant conjecture.

Section 69(5) of the Act – discussion and conclusion

37. To begin with, the applicant’s comments on, inter alia, the “crux of [its] argument” appear to proceed on a misunderstanding. There is no requirement for a respondent to be trading in order for an applicant to succeed under section 69(5) of the Act.

38. In addition, the word “consideration” used in section 69(5) of the Act has a well-established meaning, i.e. something of value given in recompense, including but not limited to cash. In these proceedings, the applicant’s claim relates to the primary respondent’s attempts to obtain business from the applicant’s customers. There is, however, no suggestion that it has attempted to obtain money or other consideration from the applicant itself.

39. Further, if, as the applicant suggests, the word “consideration” in section 69(5) is understood as covering the intentional diversion of the applicant’s goodwill to the primary respondent, then the wording of section 69(1) of the Act, particularly that the company name is “sufficiently similar to [the applicant’s] name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant”, appears to have such a similar meaning that, in our view, it is unlikely that Parliament could have intended intentional diversion of the applicant’s goodwill to the primary respondent to negate the operating defence under section 69(4)(b)(i) of the Act. In our view, it is far more likely that the operating defence was intended to avoid creating a new remedy to acts already covered under trade mark and passing-off law, and to confine section 69 of the Act to acts of opportunistic company name registration or “company name squatting.”

40. As the applicant accepts that the primary respondent has been trading and as section 69(5) of the Act has, in our view, no part to play in these proceedings, the application fails.

The other defences being relied upon

41. The applicant also relies upon defences based upon sections 69(4)(c), (d) and (e) of the Act. However, as the primary responded has already succeeded in its defence based upon section 69(4)(b)(i) of the Act, there is no need for us to decide these alternative grounds of defence and, in the interest of procedural economy, we decline to do so.

Overall outcome

42. The defence based upon section 69(4)(b)(i) of the Act has succeeded and the application fails accordingly.

Expenses

43. In her letter of 12 April 2019, the Adjudicator stated:

…The applicant should bear in mind that if the application ultimately fails, the respondent will be entitled to an award of costs for the trouble of defending the company name.

44. The applicant responded to that comment in an email dated 15 April 2019, in which it stated:

With respect, I do not agree with your comment about an award of costs should the application ultimately fail. It must logically follow that a stateable case has been made that merits further debate. As such, I consider it inappropriate to make a statement about expenses when it is the respondent who is primarily required to respond to the applicant’s interpretation of section 69(5)…”

45. In its submissions, the primary respondent states:

4b) The Applicant has been made aware from a very early stage in these proceedings that their application has very little prospects of success. It is submitted that the Tribunal allow the Applicant to progress with their application but it was made very clear to them that in the event it was unsuccessful they would have to consider the issue of expenses.

Given the background and nature of the Applicant, i.e. it is a phoenix company, the application is seen for what it is – a vexatious attempt to prohibit the operation of a legitimate company. The Applicant is the one that has sown misinformation and mislead the general public. The lack of honesty shown by the Applicant is relevant in this regard. The Respondent has been put through a great deal of trouble and expense to defend this application and in all the circumstances their whole expense should be reimbursed.”

46. Although at the hearing held on 4 April 2019, the Adjudicator warned the applicant that if its application failed the primary respondent would be entitled to an award of costs, we accept that, given the paucity of case law on how section 69(5) of the Act should be interpreted, the applicant was entitled to have its alternative view of that provision considered by the Tribunal. Although for the reasons explained we do not agree with the applicant’s interpretation, there is nothing to suggest that the applicant’s approach was vexatious or an abuse of the Tribunal. To the contrary, it appears to us that it was borne out of a genuine belief in the approach it advocated. In those circumstances, we do not intend to make an award on the basis the primary respondent requests.

47. As the primary respondent has been successful, it is, however, entitled to a contribution towards its expenses, based upon the scale of expenses published in paragraph 10.1 of the Practice Direction. Applying that guidance, we award expenses to the primary respondent/Christopher James Hampton on the following basis:

Reviewing the application and filing a defence: £400
Fee for defence: £150
Considering the applicant’s evidence and filing written submissions: £900

Total: £1450

48. We order Hampton Timber Specialists (Dundee) Limited to pay to Hampton Preservation & Maintenance Services Ltd and Christopher James Hampton (jointly) the sum of £1450 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 dismiss the application; there is no right of appeal in relation to costs.

49. 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.

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

Dated 16th March 2021

Christopher Bowen
Company Names Adjudicator

Heather Harrison
Company Names Adjudicator

Allan James
Company Names Adjudicator