Decision

Decision on Lidl Logistics Limited

Updated 6 March 2024

Companies Act 2006

In the matter of application No. 3649 by Lidl Stiftung & Co. KG for a change to the company name of Lidl Logistics Limited, a company incorporated under number 05306500

1. The company name Lidl Logistics Limited (“the primary respondent”) has been registered since incorporation on 7 December 2004 under number 05306500.

2. By an application filed on 14 October 2021, Lidl Stiftung & Co. KG (“the applicant”) applied under section 69(1) of the Companies Act 2006 (“the Act”) for the primary respondent’s name to be changed.

3. The applicant asserts rights in the name “LIDL” and claims to enjoy an extensive reputation and goodwill under the name since 1994 and that it owns an international portfolio of trade marks that includes LIDL. The applicant operates a chain of grocery stores selling a wide range of grocery products, household goods, clothing etc under the name. It has over 860 stores and 13 regional distribution centres across the UK employing over 25,000 people. It has a 6.2% share of the grocery market in the UK. It also operates the domain names www.lidl.co.uk and https://corporate.lidl.co.uk. The applicant claims that it moves goods around the UK to and from its distribution centres and on to its stores by road freight transport, the sides of which carry its LIDL branding.

4. The applicant observes that the primary respondent’s name consists of the identical distinctive element “LIDL” together with the descriptive words “Logistics” and “Limited” and claiming that its registration is contrary to Section 69(1)(a) of the Act. Further, it also claims that the primary respondent’s name would mislead consumers in the UK into believing that there was a connection to the applicant and is contrary to section 69(1)(b) of the Act.

5. The applicant also claims that the director of the primary respondent, William James Hogger, has had a business relationship with the applicant/UK subsidiary through other companies. Mr Hogger had been director of a company that provided freight transport services to the applicant in the London area from 2002 to 2018. He was also director of a third company between 2017 and 2020 that had dealings with the applicant between 2014 and 2019.

6. The primary respondent requested that the application to be struck out on the basis that it had no prospect of success or is otherwise misconceived. Following a Joint Hearing on the issue, the tribunal issued an interim decision on 18 January 2022,^{[footnote 1]} rejecting the application for strike out. By way of a supplementary decision, dated 17 February 2022,^{[footnote 2]} the tribunal corrected a procedural error in the first decision by notifying the parties that any appeal against the decision to reject the application to strike out the application could only be made when the final decision is taken in respect of whether to uphold or dismiss the application under section 69. The interim decision together and the supplementary decision are provided at Annex 1 and Annex 2 to this decision and for the purposes of any appeal, form part of this decision.

7. The primary respondent subsequently filed a notice of defence and counterstatement. It admits that the applicant has traded in the UK since 1994 and that LIDL is associated with the applicant, but it denies that:

• its name has been wrongly inserted into the Company Names register;
  
• the Act possesses retrospective legislative effect as far as it concerns the primary respondent that was registered prior to the commencement date of the Act. Further, and in the alternative, section 1279 of the Act operates to make lawful anything done, such as admittance into the Company Names register of the primary respondent

8. In addition, it also claims that the addition of the word “Logistics” in the disputed name is sufficient, in and of itself, to render the respective names not the same for the purposes of section 69(1)(a) of the Act.

9. It also claims that the applicant has recognised that the primary respondent has not traded under the contested company name and had filed dormant accounts for each year since its incorporation.^{[footnote 3]}

10. The primary respondent recognises that the issues identified at paragraph 7(ii), above, have been dismissed in the interim decision of 18 January 2022 but it wishes to reserve the right to appeal that decision so that the issues considered may form the basis of any appeal of this final decision.

11. In addition, the primary respondent also relies upon the defence that the interests of the applicant are not adversely affected to any significant extent. It relies upon the decision of the adjudicator in Zurich Insurance Company, BL O-197-10 “for its full meaning and effect.”

12. At the request of the applicant, William James Hogger was joined to the proceedings as co-respondent.

13. The parties both filed evidence. The parties were asked if they wanted a decision to be made following a hearing or from the papers. Neither side chose to be heard and we make this decision after careful consideration of the papers.

14. The applicant was represented by Urquhart-Dykes & Lord LLP (now Murgitroyd & Company) and the respondents were represented by Professor Mark Engelman, Counsel at the Thomas Cromwell Group. We make this decision having carefully considered all the papers.

Evidence

15. The applicant’s evidence consists of the witness statement of Mr David Unterhalter, Director of Legal & Compliance at Lidl Great Britain Limited, which is part of the same group of Lidl companies as the applicant and is responsible for the UK business. Mr Unterhalter provides evidence regarding the length and scale of activity in the UK. He also provides evidence regarding the past relationship between Mr Hogger and the applicant.

16. The primary respondent’s evidence consists of the witness statement of Mr Hogger in his capacity as director of the primary respondent. Mr Hogger reiterated that he does not challenge the existence of the reputation of Lidl within the UK or elsewhere. He also agrees that he had a business relationship with the applicant through another company. He gives evidence to support the claim that the applicant’s interests are not adversely affected to any significant extent.

17. The applicant’s evidence-in-reply consists of the witness statement of Shona Murray, Head of Payroll & Global Mobility, also at Lidl Great Britain Limited. She states that she can find no record of the Regional Logistics Manager referred to by Mr Hogger in his evidence, and that her search included deviations of spelling of his surname. She states that without further information it is not possible to conduct a more thorough check.

Decision

18. 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 those 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.

Goodwill/reputation

19. The relevant date for the purpose of proving goodwill/reputation is the date of the registration of the contested company name which, in this case, is the date of incorporation, 7 December 2004.

20. Sections 69(1) and (7) stipulate that the applicant must have goodwill and/or a reputation in the name associated with it. The applicant had 376 stores in the UK by the relevant date.^{[footnote 4]} The goodwill/reputation of the applicant has been accepted by the primary respondent in both its counterstatement and in Mr Hogger’s witness statement. We also agree. In light of this, we need say no more and proceed on the basis that the applicant has the goodwill and reputation required by section 69(1)(a), section 69(1)(b) and section 69(7).

Are the names “sufficiently similar”?

21. The primary respondent’s name must also be the same or “sufficiently similar” to the name in which the applicant enjoys goodwill/reputation in the UK such that it would be likely to mislead by suggesting a connection between them. The name relied upon by the applicant is “LIDL”. The differences between this name and the primary respondent’s name “Lidl Logistics Limited” is the presence of the words “Logistics Limited” in the latter’s name.

22. Owing to the differences, the names are not the same (section 69(1)(a)). However, the word “Logistics” present in the primary respondent’s name indicates that the company provides logistics services and the word “Limited” is merely descriptive of the legal nature of the business. It is “Lidl” that is the distinctive part of the primary respondent’s name. This differs from the name associated with the applicant only by the fact that it is presented in sentence case (i.e. with only the first letter capitalised) as opposed to being all capitals. Therefore, this part of the primary respondent’s name is aurally identical and visually different to the name relied upon by the applicant only to the extent that the letter case is different. Such a minor difference may well go unnoticed and this part of the primary respondent’s name is likely to be perceived as being the same as the applicant’s name. Taking all of this into account, including the high level of distinctiveness of the non-English word “Lidl”, we find that the names are sufficiently similar and that the use of the primary respondent’s name in the UK would be likely to mislead by suggesting a connection between it and the name relied upon by the applicant, and thus objectionable under section 69(1)(b) of the Act.

Defence

23. As the ground specified in subsection 69(1)(b) is established, the onus switches to the primary respondent to establish its defence. In addition to the retrospective effect point considered in the interim decision, it also relies on the defence that, under section 69(4)(e), the interests of the applicant are not adversely affected to any significant extent.

24. In its counterstatement, the primary respondent stated that it relies upon the decision of the adjudicator in Zurich Insurance Company, BL O-197-10 “for its full meaning and effect”. In the primary respondent’s submissions on costs in respect of the interim decision, Prof. Engelman relied upon the underlined parts of the following statements in Zurich:

46) Section 69(4)(e) of the Act provides a defence if the interests of the applicant are not adversely affected to any significant extent. The terms of the defence are written in the present tense. An application to the tribunal can be made at any time, there is no time limit to lodge an objection to a company name. An application could be made where at the time of the registration of the company name the interests of the applicant were adversely affected, however, by the time of the application they no longer are. It would be perverse to deny a defence that relates to the position at the date of the application, where the ill had already been cured. In relation to section 69(4)(e) the matter should be judged at the date of filing of the application; …

47) To adversely affect the interests of the applicant to any significant extent the company name must do more than just sit on the register at Companies House. In this case, the adverse effect must relate to the potential use of the company name in business. As stated earlier, a company is not limited to its principal activities (as recorded with Companies House) but it may operate in any business area, …

25. The primary respondent provides narrative evidence stating that:

• up to the commencement of these proceedings, the primary respondent had been on the Companies House register for 17 years and, in that time, Mr Hogger did not receive a single letter from any third-party intended for the primary respondent;^{[footnote 5]}
  
• Mr Hogger has never made an offer to the applicant to sell the name of the primary respondent, nor does he ever intend to do so;^{[footnote 6]}
  
• Mr Hogger is now 72 years old and retired, combined with the fact that in the past 18 years he has not traded under the LIDL name and he does not intend to do so;^{[footnote 7]}
  
• further, Mr Hogger states that when he first registered the primary respondent’s name, he did so in the full knowledge of his immediate supervisor within the UK company, Goldenville Limited. At that time his supervisor held the position of Regional Logistics Manager and reported directly to the board of Lidl UK GmbH Limited. He suggests that the applicant is mistaken when claiming that it only came to know of the primary respondent in late December 2019 as a result of a company name search

26. In reply, the applicant provided further evidence where Ms Murray conducted a limited search for the Regional Logistics Director but was unable to confirm if he had been employed by Lidl Great Britain Limited.

27. Considering the comments of this tribunal in Zurich, in the context of the current circumstances, we do not consider that the original “ills” are “cured”. The contested company name can still be used to create confusion. Mr Hogger has stated that he has no intention to use the name or the company, however, even if this is correct, it remains open to him to sell the name to someone who may use the company name in a way that would misrepresent as having a connection to the applicant. Further, Mr Hogger may change his mind and decide he does want to use it or permit use by someone else with permission. Therefore, the original “ills” remain the same now as the day the contested name was incorporated and, to borrow the language used in Zurich, have not been “cured” in the time that the primary respondent has been on the register.

28. Further, section 69(4)(b)(i) provides a defence where the respondent company is operating. It would be perverse to interpret Zurich as providing a defence of NOT operating under the name, over and above section 69(4)(b)(iii), which provides a defence if the company “was formally operating and is now dormant”. If that interpretation were to be correct, i.e. the company has never operated and is just sitting on the register, it would, in effect, create a further defence to that set out in sections 69(4)(b)(i) and (iii) (the respondent is or was operating). In combination, the defence of is or was operating and the primary respondent’s interpretation of section 69(4)(e) (i.e. never having operated) would provide very broad protection from any proceedings brought under section 69(1). This could not have been the intention of the comment made in Zurich. In our view, all that was meant by the underlined comment was that an adverse effect is created by the use or potential use of the name.

29. Finally, we will of course, take account of comments made by our colleagues in this tribunal, but we are not bound by them and remain free to decide the current case on the specific facts before us. As we have explained, we do not find it appropriate to elevate the underlined comments in Zurich to some sort of statutory test or providing a statutory defence In that case, we note that the circumstances were not the same (the respondent was trading) and recognise that the comments were made in that context. We keep in mind that the adjudicators in Zurich also stated:

41) The business operated (previously or intended) by [the primary respondent] compared to that of [the applicant] may have a bearing on the overall outcome of the application. The circumstances could factor upon the defences that the Act provide e.g. … that the company name will not cause the applicant significant harm.

30. The contested company name contains the highly distinctive word “Lidl”, a word in which the applicant enjoys a strong reputation, and also the word “Logistics”. Therefore, it could be sold to another party who may develop its own logistics fleet or even have an identical business to the applicant.

31. Mr Hogger refers to a regional logistics manager of a company associated with the applicant and that the primary respondent was registered with this person’s full knowledge. This claim has not been corroborated and the primary respondent has conducted a limited search for this person in their records but without success. Consequently, such an unverified claim does not support the primary respondent’s position. Further, even if the applicant had been aware of the registration at the time, this does not impact upon the issue of whether the company name will adversely affect its interests to any significant extent.

32. Keeping all of the above in mind, we find that the primary respondent has not made out its defence that the interests of the applicant are not adversely affected to any significant extent. In summary, we find that this defence is unsuccessful.

Outcome

33. The primary respondent cannot rely upon its defences. Therefore, the application is successful. In accordance with section 73(1) of the Act, the following order is made:

(a) Lidl Logistics Limited shall change its name within one month of the date of this order to one that is not an offending name;^{[footnote 8]}

(b) Lidl Logistics Limited and Mr Hogger 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.

34. 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.

35. 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.

36. All respondents, including individual co-respondents, have a legal duty under Section 73(1)(b)(ii) of the Companies Act 2006 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

37. The interim decision provided an opportunity for the parties to file written submissions on costs. The period provided was subsequently extended and on 3 March 2022, the primary respondent provided its submissions. On the same date, the applicant wrote, stating its view that it would be prudent for costs to be dealt with at the final determination of the proceedings. In its letter to the parties of 9 March 2022, the tribunal confirmed that it agreed with the applicant and stated:

… At [the end of the proceedings] the adjudicators will take account of the submissions already filed and, following any directions, further submissions that may be made in writing or at a hearing.

38. As the applicant has yet to provide its written submissions on costs, it is directed to do so now. These submissions should be received within 21 days of the date of this decision. The respondents are also permitted the same period to file any further written submissions to those it filed on 3 March 2020. We will consider all submissions before issuing a supplementary decision on costs.

39. Any notice of appeal against our decision must be given within one month of the date of the supplementary decision on costs.

Dated 11 November 2022

Mark Bryant
Judi Pike
Matthew Williams
Company Names Adjudicators

Annex 1

O/031/22

Companies Act 2006

In the matter of application No. 3649 by Lidl Stiftung & Co. KG for a change to the company name of Lidl Logistics Limited, a company incorporated under number 05306500

Joint hearing

Background and pleadings

1. This decision relates to a request by Lidl Logistics Limited (“the respondent) to strike out the application before it files a defence. In his letter of 25 November 2021, Professor Mark Engelman, Counsel for the respondent, submitted that the application, which is based on section 69 of the Companies Act 2006 (“the Act”), should be struck out because:

• the respondent was registered on 7 December 2004;
  
• section 69 of the Act came into effect on 1 October 2008 (4 years after the date the respondent was registered);
  
• the Act does not have retrospective effect;
  
• it follows that pre-existing company names, including that of the respondent, are not governed by section 69 of the Act and were the adjudicator to apply section 69 to the respondent’s company name adversely to the interests of either party, the decision would be an exercise in the unfair and arbitrary

2. Prof. Engelman referred to the following comments of the House of Lords:^{[footnote 9]}

Considerable difficulties, however, might arise if the new interpretation of legislation, consequent on an application of section 3, were always to apply to pre-Act events. It would mean that parties’ rights under existing legislation in respect of a transaction completed before the Act came into force could be changed overnight, to the benefit of one party and the prejudice of the other. This change, moreover, would operate capriciously, with the outcome depending on whether the parties’ rights were determined by a court before or after 2 October 2000. The outcome in one case involving pre-Act happenings could differ from the outcome in another comparable case depending solely on when the cases were heard by a court. Parliament cannot have intended section 3(1) should operate in this unfair and arbitrary fashion.

3. In addition he referred to the Civil Procedure Rules 3.4.1, headed: “Power to strike out a statement of case” which, he acknowledged, merely informs the adjudicator with respect to interpretation of The Company Names Adjudicator Rules 2008 (“the Rules”), and is not binding upon the adjudicator. This states:

Applications under r.3.4 should be made as soon as possible (emphasis added) and before allocation if possible (PD supplementing r.3.4, para.5.1, see para.3APD.5). If the application is made by the defendant against the claimant’s statement of case, the claimant cannot obtain a default judgment until that application is disposed of (r.12.3(3)(a)).

4. Prof. Engelman states that, without prejudice to any other defence the respondent has, the case brought by Lidl Stiftung & Co. KG (“the applicant”) is entirely based upon section 69 of the Act and, accordingly, is an “application … in whole … which has no reasonable prospect of success or is otherwise misconceived”.

5. In response to the request, the tribunal issued a preliminary view to refuse the request on 2 December 2021. It stated:

In respect of the request for strike-out the application on the ground that The Companies Act 2006 does not have retrospective effect. This appears to be incorrect because section 1 of the Act states:

1. Companies

(1) In the Companies Acts, unless the context otherwise requires—

“company” means a company formed and registered under this Act, that is—

(a)  a company so formed and registered after the commencement of this Part, or

(b) a company that immediately before the commencement of this Part—

(i) was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii) was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

(2) Certain provisions of the Companies Acts apply to—

(a)  companies registered, but not formed, under this Act (see Chapter 1 of Part 33), and

(b)  bodies incorporated in the United Kingdom but not registered under this Act (see Chapter 2 of that Part).

(3)  For provisions applying to companies incorporated outside the United Kingdom, see Part 34 (overseas companies).

The underlined text provides retrospective effect in respect of companies registered under the 1985 Act. Further, even in the absence of an express provision that the Act has retrospective effect, the policy aim of section 69 was to avoid companies having to go to court for an order to get a company name changed under passing off law. When considering the nature and purpose of the provision and the consequences of applying it to existing circumstances it is clear that it does not introduce a new requirement or change to the rules of property but, rather, it seeks to provide a remedy to a perceived existing mischief, i.e. company name squatting. In context, there is every reason to believe that it was intended to be applied to existing companies as well as new ones.  It does not make anything unlawful that was not already unlawful. Rather, it simply adds a more affordable remedy.

For these reasons, the preliminary view is to reject the request to strike out the application.

6. On the 7 December 2021, Prof. Engelman replied providing further reasoning and, if these further reasons were not considered sufficient to grant the request to strike out, requested a hearing. He submitted that section 1 of the Act does not displace the general principle that Acts of Parliament do not have retrospective effect.^{[footnote 10]} Prof. Engelman referred to Schedule 2 of The Companies Act 2006 (Commencement No. 8, Transitional Provisions and Savings) Order 2008 (“the Order”). Article 17(1) of that Schedule, headed “Transitional Provisions and Savings” under the sub-heading “A company’s name (ss. 53 to 81)” states:

The following provisions of the Companies Act 2006 do not affect the continued registration of a company by a name by which it was duly registered—

(a) in the case of an existing company, immediately before 1st October 2009.

(Prof. Engelman’s emphasis)

7. He submitted that this article expressly overrides any intention otherwise conveyed by section 1 of the Act that it might have retrospective effect.

8. A joint hearing was held on 21 December 2021 where the respondent was represented by Professor Mark Engelman of Counsel and the applicant was represented by Ms Anna Szpek for Murgitroyd & Company

Decision

9. Rule 5(2) of The Company Names Adjudicator Rules 2008 (“the Rules”) states:

The adjudicator may strike out the application or any defence in whole or in part if it is vexatious, has no reasonable prospect of success or is otherwise misconceived.

10. I reproduce below the full text of Article 17 of Schedule 2 of the Order to give its full context:

A company’s name (ss. 53 to 81)

17 —(1) The following provisions of the Companies Act 2006 do not affect the continued registration of a company by a name by which it was duly registered—

(a) in the case of an existing company, immediately before 1st October 2009, or

(b) in the case of a transitional company, on its registration or re-registration (as the case may be).

(2) The provisions are—

(a) section 54 (name suggesting connection with government or public authority);

(b) section 55 (other sensitive words or expressions);

(c) section 57 (permitted characters etc);

(d) section 65 (inappropriate use of indications of company type or legal form);

(e) section 66 (name not to be the same as another in registrar’s index).”

11. At the hearing, Prof. Engelman maintained the claim that the Act generally and section 69 specifically do not have retrospective effect. There were three elements to his submissions, namely, that:

• there is general presumption against retrospectivity unless the legislation contains specific statements to the contrary;
  
• (a) there is no specific statement in the Act that indicates it has retrospective effect and, (b) Article 17 of the Order and section 1297 of the Act contain provisions that, it is submitted, point to there being no such effect, and;
  
• the parliamentary debate during the Act’s passage through Parliament included a statement that the Act does not have retrospective effect

First Limb: a general presumption against retrospectivity

12. There is no dispute that the tribunal has the power to strike out an application^{[footnote 11]} nor that there is a general presumption against retrospectivity. The latter is set out by the House of Lords in Wilson and others. Consequently, I agree with the first limb of Prof. Engelman’s submissions.

Second Limb: (a) no specific statement(s) in the Act to indicate that it has retrospective affect and, (b) Article 17 of the Order and section 1297 of the Act contain provisions that, it is submitted, point to there being no such effect

13. I begin by commenting upon the provisions under section 1 of the Act and Article 17(1) of the Order. In respect of section 1, it provides that a company formed under the 1985 Act is to be treated as if formed and registered under the Act. On an ordinary interpretation of this, a company, such as the respondent, formed under the 1985 Act should be treated in the same way as if it was formed under the Act and this treatment would include treatment under section 69 of the Act. On the face of it, this provides retrospective effect.

14. Article 17(1) of Schedule 2 of the Order provides certain explicit exclusions regarding the effect of section 1. It provides a list of sections of the Act that cannot have an effect upon the continued registration of a company registered under the 1985 Act. Significantly, section 69 is not listed. Prof. Engelman submitted that section 66 (that is listed) incorporates within its language the very same words as section 69. Section 66 states:

66 Name not to be the same as another in the index

(1)  A company must not be registered under this Act by a name that is the same as another name appearing in the registrar’s index of company names. (my emphasis)

15. He argued that since Article 17(1) and section 66 of the Act preclude the Secretary of State from deciding a “same name” issue because the company was formed under the 1985 Act, it would make no sense” for members of the public not also to be precluded from bringing a “same name” case under section 69. Such an argument fails to identify an important distinction between section 66 and section 69. Section 66 is a provision that has effect upon company names that are the same as another company name on the Companies Register. On the other hand, section 69 is a provision where a company name is the same or sufficiently similar to a name associated with the applicant in which he has goodwill. Section 66 provides a remedy for avoiding identical company names on the Companies Register. Section 69 provides a remedy against a company name that impinges upon the goodwill of another party.

16. This difference of purpose is reflected, in practical terms, by the fact that the Company Names Tribunal was expressly set up to act as the decision-making body in respect of disputes under section 69 and to use its powers as specifically referred to in sections 72 – 74. These sections reference the role of company names adjudicators in determining applications under section 69. The tribunal does not determine issues under section 66. This illustrates that section 69 was introduced to provide a remedy to a perceived existing mischief, i.e. company name squatting and as stated in the preliminary view, it does not make anything unlawful that was not already unlawful. Rather, it simply adds a more affordable remedy in the form of this tribunal.

17. Prof. Engelman also submitted that section 1(b)(i) of the Act does not constitute an express statement that section 69 is intended to have retrospective effect. It is true that section 69 is not expressly mentioned, however, it is clear that section 1(1) is intended to apply to the provisions of the Act because of the following wording (with my emphasis):

(1) In the Companies Acts, unless the context otherwise requires—

“company” means a company formed and registered under this Act, that is—

(a)  a company so formed and registered after the commencement of this Part, or

(b) a company that immediately before the commencement of this Part—

(i) was formed and registered under the Companies Act 1985 (c. 6) …

(which is to be treated on commencement as if formed and registered under this Act).

18. Prof. Engelman also contended that section 1(1)(a) and section 1(1)(b) should be taken to be cumulative and that section 1(1)(b) only applies to companies identified by the subset of companies caught by section 1(1)(a). I dismiss this because it is very clear from the use of the word “or” at the end of the section 1(1)(a) provision that they are alternative rather than cumulative provisions. As a consequence, section 1(1)(b)(i) must apply to all companies formed under the 1985 Act unless they are specifically excluded. Article 17(1) of Schedule 2 of the Order provides some limited exceptions but, as I have already determined, section 69 is not one of them.

19. Therefore, taking the provision set out in section 1 of the Act and the limited nature of the exclusion to the retrospective nature of the Act as set out in Article 17(1) of Schedule 2 of the Order, it appears that a company, such as the respondent, is subject to the provisions set out in section 69.

20. Prof. Engelman countered this in his submission that section 69 does not have retrospective effect when considered in the context of section 16(1) of The Interpretation Act 1978 and the leading case law on the interpretation of this and, therefore, I must find that there is no retrospective effect. The relevant part of section 16(1) of The Interpretation Act states:

…, where an Act repeals an enactment, the repeal does not, unless the contrary intention appears … (b) affect the previous operation of the enactment repealed or anything duly done or suffered under that enactment; (c) affect any right, privilege, obligation, or liability acquired, accrued or incurred under that enactment … (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the repealing Act had not been passed.

20. The “contrary intention” referred to in this section is provided in section 1 of the Act when it states that “a company … formed and registered under the Companies Act 1985 … [is] to be treated on commencement as if formed and registered under this Act.” Article 17 would provide a “carve out” from the principle set out in section 1 of the Act but it is clear, as I have already discussed, that Article 17 does not impact upon section 69 of the Act. Therefore, I dismiss the first element of the second limb of Prof. Engelman’s submission.

21. The second element concerns the impact of section 1297 of the Act. The relevant part of this section states:

1297 Continuity of the law

(1) This section applies where any provision of this Act re-enacts (with or without modification) an enactment repealed by this Act.

(2) The repeal and re-enactment does not affect the continuity of the law.

(3) Anything done (including subordinate legislation made), or having effect as if done, under or for the purposes of the repealed provision that could have been done under or for the purposes of the corresponding provision of this Act, if in force or effective immediately before the commencement of that corresponding provision, has effect thereafter as if done under or for the purposes of that corresponding provision.

22. To interpret this section in the way submitted by Prof. Engelman creates an obvious tension with the provision contained in section 1 of the Act and also with Article 17 of the Order. The only part of this provision that bites upon the current issue is that a repeal and re-enactment does “not affect the continuity of law” (sub-paragraph (2)). The substantive issue of this case is whether the registration of the respondent was done for opportunistic reasons as set out in section 69. It is inconceivable that a reference to “continuity of law” would include permitting an opportunistic registration to remain on the register and to act as a bar to a legitimate challenge that a registration is opportunistic. Such an interpretation would be contrary to section 1 of the Act where it is stated that a company formed under the 1985 Act is “treated … as if formed and registered under [the Act]”. This provision has the effect of bringing the provisions in section 69 to bear upon a company formed under the 1985 Act. I conclude that section 1297 of the Act does not remove retrospective effect of section 69.

23. For clarity, my decision regarding the impact of section 1297 on the retrospectivity of section 69 results in there being no “context” that “otherwise requires”^{[footnote 12]} a company formed under the 1985 Act to not be treated as if formed under the Act for the purposes of section 69.

Third Limb: the parliamentary debate during the Act’s passage through Parliament included a statement that the Act does not have retrospective effect

24. The third limb of Prof. Engelman’s submission is that the Hansard record rebuts the policy argument raised in the preliminary view. In particular, Prof. Engelman referred to the exchanges in the Committee of the House considering the Company and Business Names (Amendment) (No. 2) Regulations 2007 introduced by Lord Bach. These exchanges were between Lord Hodgson and Lord Bach:^{[footnote 13]}

Lord Hodgson: “…it is clearly sensible that there should be a power to stop individuals and companies being set up in a way that gives greater weight to them or implies associations that do not in fact exist. I also understand the pre-prohibition requirement to stop the unscrupulous dashing in during the gap between the regulations being published and coming into force. My only surprise is that we have got as far as this without the words “Government” and “NHS” being on the list. I know that “royal” and “national” are on the list because I was once involved, along with the Bank of England, in setting up a company with the word “national” in its title. It took an inordinate amount of time to unravel it, even though the Bank was keen on the formation of the particular company.

I have one query on the detail of the regulation. Paragraph 2.3 of the Explanatory Memorandum states:

The Regulations will not affect any company that already has a name including ‘Government’ or ‘HPSS’, ‘HSC’ or ‘NHS’.

The same goes for any business. There is no retrospective effect in these regulations. Am I right in believing that if an organisation has such a name in its title, it has got it? I ask this because if it is retrospective, that is another issue. The paragraph goes on to state:

There is a transitional provision for those to whom such a business is transferred”.

Lord Bach: “The new powers are to be found in the Companies Act under Section 55, which covers company names, and the other section is—wait for it—Section 1,194, for business names. I hope that that answers the first question of the noble Lord, Lord Hodgson. On the question about retrospective effect, there is none. On transfer, the expression in Section 2(2)(b) of the Business Names Act 1985 places no restriction on the meaning of the word “transfer”.”

25. From this exchange it can be seen that Lord Bach was responding to a specific query regarding the use of the words/acronyms ‘Government’, ‘HPSS’, ‘HSC’ or ‘NHS’ in a company name. Therefore, it is reasonable to interpret Lord Bach’s comment as specifically referring to the provisions in the Act that deal with the provisions in the Act such as sections 54 and 55. I note that these provisions are among the sections expressly listed at article 17(2)(b) of Schedule 2 of the Order. I find further support for this in that if Lord Bach’s comments were intended to indicate that the Act had an overarching absence of retrospectivity, then this would be at odds with the provisions contained in section 1 and create tension with the purpose of article 17(1) of Schedule 2 of the Order that only identifies certain provisions as not having retrospective effect.

26. In summary, I reject Prof. Engelman’s third limb regarding the claimed general absence of retrospective effect of the Act. Further, the exchange does not counter the preliminary view that section 69 does not introduce a new requirement or change to the rules of property but, rather, it seeks to provide a remedy to a perceived existing mischief, i.e. company name squatting.

Outcome

27. Taking all of the above into account, I conclude that section 69 has retrospective effect and I reject the respondent’s claim to strike out the application. As a consequence, the proceedings continue.

28. After the deadline for submissions on costs (see paragraph 30, below) has passed, the parties will be informed of a revised timetable for the proceedings, including the date for the respondent to file its defence.

Costs

29. The Tribunal awards costs from the published scale at paragraph 10 of the Tribunal’s Practice Direction. This is intended to provide a contribution to costs, but not to recompense the successful party. The applicant has been successful and would normally be entitled to a contribution towards its costs. Ms Szpek agreed with Prof. Engelman that I should defer making any award of costs whilst the parties were engaged in mediation. I did not take further submissions on costs and agreed to await the conclusion of mediation.

30. I consider that a month from the date of this decision is sufficient to conclude mediation activities and, therefore, the parties are directed to provide written submissions on the issue of costs within 28 days of the date of this decision and, if necessary, I will then issue a supplementary decision on costs.

31. 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. The Tribunal must be advised if an appeal is lodged.

Dated 18 January 2022

Mark Bryant
Company Names
Adjudicator

Annex 2

O/143/22

Companies Act 2006

In the matter of application No. 3649 by Lidl Stiftung & Co. KG for a change to the company name of Lidl Logistics Limited, a company incorporated under number 05306500

Supplementary decision

1. A decision relating to a request to strike out this application^{[footnote 14]} was issued on 18 January 2022 (hereafter “the decision”). Following a letter of 26 January 2022 from the respondent’s counsel, Prof. Mark Engelman it has come to my attention that the decision contained a procedural error. Paragraph 31 of that decision stated:

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. The Tribunal must be advised if an appeal is lodged.

2. The scope of a right of appeal in respect of an adjudicator’s decision is set out in section 74(1) of the Companies Act 2006. This states the following:

74 Appeal from adjudicator’s decision

• an appeal lies to the court from any decision of a company names adjudicator to uphold or dismiss an application under section 69

3. The decision was neither upholding or dismissing an application under section 69 and, consequently, there is currently no appeal under section 74(1). Any appeal against the decision the reject the application to strike out the application can only be made when the final decision is taken in respect of whether to uphold or dismiss the application under section 69.

As a result, to correct this procedural error, this supplementary decision amends the decision by removing paragraph 31.

Dated 17 February 2022

Mark Bryant
Company Names
Adjudicator

1. BL O/031/22 ↩

2. BL O/143/22 ↩

3. The primary respondent points to a letter from the applicant dated 3 August 2020 and to the answer to Question 14 of the applicant’s Form CNA1 where it states that “accounts for a dormant company has been filed every year since” 7 December 2004. ↩

4. Mr Unterhalter’s witness statement, para 6 ↩

5. Mr Hogger’s witness statement at {8] ↩

6. Ditto at [9] ↩

7. Ditto at [10] ↩

8. 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. ↩

9. See Wilson and others v. Secretary of State for Trade and Industry [2003] UKHL 40 at [18] considering the issue in the context of The Consumer Credit Act. ↩

10. As laid down by the House of Lords judgment in Wilson and others v. Secretary of State for Trade and Industry [2003] UKHL 40. ↩

11. Under rule 5(2) of the Rules ↩

12. the language used in section 1 ↩

13. See pages 27 – 29 of the bundle accompanying Prof. Engelman’s skeleton argument ↩

14. BL O/031/22 ↩