Decision

Decision on Marchwood Yacht Club Limited

Published 12 June 2019

Companies Act 2006

In the matter of application No. 1816 by Marchwood Yacht Club

For a change of the company name of registration No 9934035

Background, Claims and Defences

1. MARCHWOOD YACHT CLUB LIMITED (hereafter ‘the respondent’) was incorporated on 4 January 2016.

2. On 7 August 2018, MARCHWOOD YACHT CLUB (an unincorporated association) (hereafter ‘the applicant’) applied for an Order under section 69 of the Companies Act 2006 (‘the Act’) for the company name MARCHWOOD YACHT CLUB LIMITED to be changed.

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. The applicant requested that the primary respondent’s director, Mr Philip Tucker, be joined to the proceedings under the provisions of section 69(3) of the Act. Mr Tucker was given notice of this request and provided with an opportunity to comment or to object. No response was received from Mr Tucker and he was joined to the proceedings as a co-respondent on 28 March 2018.

5. The applicant claims that the name associated with it is Marchwood Yacht Club.

6. In its CNA1 it submits that the applicant was formed in 1963 as an unincorporated association operating as a not for profit organisation. It has charitable status. The membership includes beginners and experienced sailors and currently had 320 members. When affiliates and family members are included, there are more than 600 individuals associated with the club. The club is affiliated to the Royal Yacht Association and has a long-standing history and relationship with the local community.

7. The applicant has a clubhouse, galley and dining room which can accommodate 200 people and holds ‘food themed’ nights along with a programme of lectures over the winter months. Mooring is available for boats up to 40 feet in length with a pontoon for deep water berths and a boat park with capacity for 160 boats for winter storage and annual maintenance. The club has its own private slipway for launching and recovering boats and dinghies. The applicant regularly arranges sailing cruises and sailing tuition with Friendly Club Racing taking place on Wednesday evenings and at weekends.

8. The applicant has its own shop selling branded clothing and has hosted its own website (www.marchwoodyc.org.uk) since 2010 ^{[footnote 1]}.

9. The applicant submits that it has, “considerable goodwill and a strong reputation in its local area, the city and within the wider sailing and boating community”.

10. In addition, the applicant claims that the primary respondent’s company name has caused confusion for suppliers, contractors and customers. The respondent’s registered company name is too similar to the applicant’s club which is located on the same road as the respondent’s registered office? This is a pleading under section 69(1)(b) of the Act. The applicant requests that the Tribunal make an order under section 73 of the Act for the name to be changed to a name which does not offend. ^{[footnote 2]}

11. At paragraph 3 of the attachment to the application for a change of company name the applicant submits:

“Contact with Philip Tucker: [The applicant] has not had any contact with Mr Tucker. The Secretary has attempted to make contact with Mr Tucker at his premises but no-one was at home. Some time ago a member of the club wrote to him at 10 Maritime Avenue on the Club’s behalf, concerning the use of the Club’s name but there was no response. A copy of this letter is attached at page 5.”

12. The applicant filed evidence in the form of two witness statements. The first is David Robert Rouse, a member of the applicant since 1991 and its current Honorary Secretary. Paragraphs 24 and 25 of Mr David Rouse’s witness statement submit that he called twice at the primary respondent’s Maritime Avenue address, once on a Sunday lunchtime and a second time, on the way to a meeting at the applicant’s club on a Monday. There was no answer on either occasion. He further submits that the applicant’s solicitor wrote to Mr Tucker on the applicant’s behalf, concerning the use of the applicant’s name but no response was received.

13. The second of the applicant’s witness statements is by Mr Russell Hawkins, (the applicant’s secretary between November 2014 and November 2017). He submits that he became aware of the contested company name registration in January 2016 when a letter from Companies House was posted to the applicant in error. On 25 January 2016 Mr Hawkins visited the respondent’s address which he describes as being ‘about 100 yards away’ from the applicant’s premises. There was no answer.

14. Mr Hawkins concludes his statement as follows:

“9. I live between the yacht club and 10 Maritime Avenue. On more than six occasions while I was the secretary I knocked on the door of 10 Maritime Avenue to speak to the occupant but never has anyone answered.”

15. Further attempts, by third parties, to contact the respondents are referred to in the witness statements provided by the applicant’s past and present secretaries.

16. The respondent filed a counterstatement (form CNA2), which was completed by Mr Philip Tucker. Section 3 of the form specifically asks the respondent to set out any defences upon which it wishes to rely. The respondent indicated that ‘the interests of the applicant are not adversely affected to any significant extent’. A short letter is attached to the form. This is the only submission made by the respondent and we reproduce it in full:

“ 1. Since its incorporation in January 2016 the Company has remained dormant and undertaken no activities of any kind, no letters or emails have been written or sent and there is no web site or other public presence. The only actions taken have been the provision of Statutory Dormant Accounts to HMRC and Companies House and the filing of the Confirmation Statement with Companies House. Only one letter has ever been received and that was in January 2016.

2. I live and work from home at [10 Maritime Avenue] and no one has ever called at my property or tried to make contact with me at my address.

3. I have not used the applicant’s details in any way and refute that there has been ‘passing off’ of any kind.”

17. The claim made by the respondent relates to a potential defence under section 69(4)(e).

18. In addition to the applicant’s evidence filed on 23 November 2018, it filed written submissions dated 20 March 2019. The respondent filed neither. None of the parties requested a hearing and so this decision is taken following careful consideration of the papers filed.

Evidence

19. At paragraph 45 of his statement Mr Rouse submits:

“As a consequence of Mr Tucker’s pursuits, the [applicant] has experienced difficulty obtaining credit because of the unsanctioned acquiring of our name. It has received telephone calls, sometimes from irate or annoyed individuals, and companies, trying to contact Mr Tucker…”

20. Mr Rouse submits that prior to September 2017 the applicant lost its chef and in making new arrangements, the Flag Officers approached a wholesale food supplier to supply the club restaurant. Initially, the applicant was refused credit on the basis that it was the respondent company. A letter was sent to the wholesaler from the applicant to explain that there was no connection between the two businesses and that the applicant had no connection to Mr Tucker. That letter is dated 25 September 2017. ^{[footnote 3]}

21. Mr Rouse also provides seven examples of people attempting to contact the co-respondent on the applicant’s business telephone. These occurred between 4 December 2017 and 8 November 2018 and include an estate agent, an insurance company and number of private individuals. Two of these are described as irate or angry when they were informed that Mr Tucker was not connected to the applicant.

22. The remaining evidence relates to activities of other businesses owned by the co-respondent, Mr Tucker. There is no need to say anything more about this because it is not relevant to this case.

Decision

23. The applicant must establish that it has goodwill or reputation in relation to a name that is the same, or sufficiently similar, to that of the respondent’s company name suggesting a connection between the company and the applicant. Only if this burden is fulfilled is it then necessary to consider if the respondent can rely upon defences under section 69(4) of the Act. The relevant date is the date of incorporation of the contested company which, in this case, is 4 January 2016. The applicant must show that it had a relevant goodwill or reputation at this date.

Goodwill

24. The respondent makes no definitive statement with regard to the applicant’s goodwill.

25. The evidence in support of the applicant’s case is provided in the applicant’s statement of case and in the witness statements of Mr Rouse and Mr Hawkins, both of whom (at different times) have been elected Honourable Secretary to the applicant.

26. The applicant has not provided documentation in support of its goodwill, beyond the statements referred to above. These statements as to the nature of the business have not been challenged and each includes a statement of truth, signed by the respective witness.

27. From the witness statements, it is clear that the applicant operates a yacht club. The club provides a clubhouse, mooring facilities and access to waterways via its private slipway. In addition, tuition, cruises and competitions are arranged and provided by the club. The applicant operates a shop which sells, inter alia, branded clothing and also has a website at www.marchwoodyc.org.uk.

28. The applicant’s yacht club is affiliated to the Royal Yacht Association and is an authorised RYA training centre. It is a not for profit organisation, operated primarily by volunteers. It is run by a general committee which has elected officers, including (at various points) the two Honourable Secretaries who have given evidence. Within the statements reference is also made to the club’s bar steward, bar staff and Flag Officers.

29. As well as providing sailing events for its members, the club also offers dinghy sailing to local residents and their children in the summer months. ^{[footnote 4]}

30. The primary public-facing trading name of the business is Marchwood Yacht Club.

31. It is clear from the evidence that the business referred to in the pleaded case is well-known in the local area, having been established in 1963. Mr Rouse describes it as enabling people in the local area to enjoy sailing. Given the applicant’s affiliation with the Royal Yacht Association and the fact that it is an authorised training centre, it is likely that knowledge of the applicant extends beyond the local area, though from the evidence provided, we cannot be sure to what extent. Taking all of the statements into account the evidence is sufficient to establish that the applicant had goodwill in the UK at the relevant date in relation to the operation of a yacht club. Goodwill lies in the name ‘Marchwood Yacht Club’.

Does the respondent’s company name suggest a connection between it and the applicant?

32. The respondent’s name is MARCHWOOD YACHT CLUB LIMITED. The name associated with the applicant is ‘Marchwood Yacht Club’. Consequently, the difference between the names is the absence/presence of “LIMITED” which simply indicates the corporate status of the company, something which is necessary in most company names. We consider that this difference is to be ignored for the purpose of the comparison (see, for example, MB Inspection Ltd v Hi-Rope Ltd ^{[footnote 5]} at paragraph 48).

33. Consequently we find these names to be the same. If we are wrong about that then the respondent’s name is sufficiently similar to ‘Marchwood Yacht Club’ such that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

34. Given our findings in respect of goodwill and the connection likely to be made between the respective company names, the applicant has cleared the first two burdens placed upon it. That is the end of the matter unless the respondent can avail itself of one or more of the defences. This is a matter to which we now turn.

Defences

69(4)(e) -The interests of the applicant are not adversely affected to any significant extent.

35. The respondent is relying upon one defence, this being that the interests of the applicant not being adversely affected to any significant extent. 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.

36. The principal activities for which the respondent’s company name is registered are ‘sports activities’. We bear in mind that under the Act the connection under section 69(1) must be made upon the basis of the names themselves. Thus, the field of activity is not strictly pertinent (although it may have relevance when it comes to establishing defences). In any event, fields of activities may change. In fact, in this case the co-respondent has stated that, “Since its incorporation in January 2016 the Company has remained dormant and undertaken no activities of any kind”. Notwithstanding this, sports activities would include watersports and yachting which are directly applicable in these circumstances.

37. To rely on a ‘no adverse effect’ defence it is for the respondent to show, in evidence, what it has done or intends to do. The respondent has not provided any evidence and the defence must fail at the first hurdle.

38. In addition, despite the applicant’s assertion that the primary respondent is a dormant company, we note that this has not prevented a number of individuals and companies contacting the applicant in the mistaken belief that it is connected to the co-respondent. This suggests that the primary respondent has engaged in activity of some kind. There are also claims that the presence of the respondent company has impacted the applicant’s ability to obtain credit. These factors must, at least, be time consuming for the applicant to deal with and clearly show that the respondent’s registration of what is in effect, the same company name, is having an adverse effect on the applicant’s business.

39. For all of the reasons indicated, the ‘no adverse effect’ defence under section 69(4)(e) of the Act is rejected.

Conclusion

40. The application is successful. In accordance with section 73(1) of the Act, the following order is made:

(a) MARCHWOOD YACHT CLUB LIMITED shall change its name within one month of the date of this order to one that is not an offending name;

(b) MARCHWOOD YACHT CLUB LIMITED and Mr Philip Tucker shall:

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

(ii) not cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name.

41. In accordance with section 73(3) of the Act, this order may be enforced in the same way as an order of the High Court or, in Scotland, the Court of Session.

42. In any event, if no such change is made within one month of the date of this order, a new company name will be determined as per section 73(4) of the Act and notice will be given of that change under section 73(5) of the Act.

43. 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

44. The applicant has been successful and so we turn to the matter of costs.

45. The applicant submits that, ‘some time ago’ one of its members wrote to the primary respondent on its behalf regarding the registration of the contested company name but that no response was received to that letter. No date is provided for this correspondence. ^{[footnote 6]} The applicant further submits that its solicitor wrote to Mr Tucker at 10 Maritime Avenue concerning use of the applicant’s name but that no response was received. ^{[footnote 7]} Neither of these letters have been provided in evidence.

46. In addition, Mr Hawkins states that he visited the primary respondent’s address on 25 January 2016, when a letter from Companies House was delivered to the applicant in error. He submits that in total, he visited the address on ‘more than six occasions’ and did not receive an answer at any time. Mr Rouse confirms that he also visited the primary respondent’s address on two occasions, again no answer was forthcoming.

47. In a letter attached to the primary respondent’s CNA2, Mr Tucker says, “Only one letter has ever been received and that was in January 2016.” It is not clear who this letter was from or what it related to. In addition, Mr Tucker submits:

“2. I live and work from home at [10 Maritime Avenue] and no one has ever called at my property or tried to make contact with me at my address.”

48. It is clear from the applicant’s evidence that the applicant itself, along with five other individuals and two businesses, have attempted to contact the primary and co-respondent in this case, seemingly without success.

49. Taking all of the evidence and submissions into account we find that the applicant has taken reasonable steps to contact the primary respondent at the address given on the company register and consequently it is entitled to a contribution towards its costs on the basis of the scale of costs ^{[footnote 8]} which applied at the date these proceedings were commenced.

50. We award the following:

Fee for filing the application: £400
Fee for filing evidence: £150
Preparing a statement and considering the counterstatement: £400
Preparing evidence: £400
Written submissions: £400

Total: £1750

51. MARCHWOOD YACHT CLUB LIMITED and Mr Philip Tucker are ordered to pay MARCHWOOD YACHT CLUB the sum of £1750 within fourteen days of the expiry of the appeal period, or within fourteen days of the final determination of this case if any appeal against this decision is unsuccessful. The respondents are jointly and severally liable for these costs. Under section 74(1) of the Act, an appeal can only be made in relation to the decision to uphold the application; there is no right of appeal in relation to costs.

52. 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 6 June 2019

Al Skilton
Company Names Adjudicator

Mark King
Company Names Adjudicator

Allan James
Company Names Adjudicator

1. We note that the CNA1 says 2010, but the attached submissions say 2005. ↩

2. Section 73(2) of the Act provides that 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. ↩

3. See exhibit DRR3. ↩

4. See Rouse, paragraph 9 ↩

5. [2010] RPC 18 ↩

6. Paragraph 3 of the CNA1 states that the letter is attached at page 5 but it has not been provided. ↩

7. See Rouse, paragraph 25. ↩

8. Published in the Practice Direction. ↩