Decision

Decision on Movega Removals Limited

Published 30 March 2023

Companies Act 2006

In the matter of application No. 3869 by MOVEGA REMOVALS LTD for a change to the company name of MOVEGA REMOVALS LIMITED, a company incorporated under number 09923836.

1. This is a decision on the matters discussed at the hearing held before me on 27 February 2023. The hearing was appointed upon request by MOVEGA REMOVALS LTD (“the applicant”) to contest the Tribunal’s preliminary view of 24 January 2023 to close the proceedings in relation to application No. 3869 and award the applicant costs in the sum of £1,450. Application no. 3869 was made by the applicant under Section 69 of the Companies Act 2006 (“the Act”) for the change of the company name MOVEGA REMOVALS LIMITED (“the respondent”) in relation to Company Registration Number 09923836.

2. At the hearing, Mr Philip Leonard appeared on behalf of the applicant. Mr Daniel Blanche appeared on behalf of the respondent. I should set out briefly the background to the case.

Background

3. On 3 May 2022, the applicant filed an application form (Form CNA1) to challenge the name of the respondent’s company. At the time when the Form CNA1 was filed, the respondent’s company was called MOVEGA REMOVALS LIMITED (this name was adopted on 10 January 2022, the company being initially incorporated under the name UK MOVING LIMITED which was later changed to DPB VANS LIMITED and subsequently to APP A VAN LIMITED). The respondent also made a request, under Section 69(3) of the Act, that Mr Blanche be joined to the proceedings owing to his position in the company as Director.

4. On 29 July 2022, the respondent filed a notice of defence (Form CNA2) relying on various defences, in relation to which I do not need to go into any detail.

5. On 2 November 2022, Mr Blanche was joined as co-respondent. Although Mr Blanche has subsequently made a number of complaints about having been made co-respondent, I have dealt with this in a separate letter and, again, I do not need to go into the details.

6. The case proceeded to the evidence rounds and the applicant filed evidence on 13 December 2022. The respondent was given until 21 February 2022 to file its evidence.

7. On 21 December 2022, the respondent’s name was changed from MOVEGA REMOVALS LIMITED to NEVENA DANIELOVA ZHELEVA LIMITED. The respondent notified the Tribunal of the change of name on 13 January 2023.

8. On 24 January 2023, the Tribunal wrote to the parties stating that given the respondent’s company change of name, the application appeared to be without object and the Tribunal was minded to close the case. The Tribunal also indicated that it was the preliminary view of the Adjudicator that £1,450 be awarded to the applicant setting a deadline of 7 February 2023 for the parties to state whether they agreed to the closing of the case. The hearing of 27 February 2023 was appointed following the applicant’s request to be heard in relation to the preliminary view to close the case and award the applicant costs.

The submissions at the hearing

9. On 7 February 2023, Mr Leonard filed a witness statement stating the full reasons for his request that the case proceed to a final hearing - most of the arguments set out in the witness statement were also reiterated at the hearing. The main points raised by Mr Leonard at the hearing were as follows:

• based on the behaviour of the respondent and the co-respondent to date and the evidence submitted by the respondents themselves, there is good reason to believe that after these proceedings are closed there is a real prospect that the respondent and the co-respondent will adopt or re-adopt names that include or are similar to “Movega Removals” as the name for UK registered companies;

• should the Tribunal conclude that such a real prospect exists, the applicant has a bona fide reason to seek an order from the Tribunal requiring that the respondent and co-respondent do not adopt, re-adopt or continue to use names that include or are similar to “Movega Removals”. According to Mr Leonard, the Tribunal has the power to make such an order;

• the respondent and co-respondent have registered other companies incorporating names that are similar to MOVEGA REMOVALS. The offending names were adopted on the same day that the respondent’s company name was changed from MOVEGA REMOVALS LIMITED to NEVENA DANIELOVA ZHELEVA LIMITED, i.e. on 22 December 2022. No objection has been filed to date against these companies. Nevertheless, Mr Leonard requested that if the current proceedings are not closed, I should direct that they are consolidated with future objections that are yet to be raised against the other offending companies names;

• the respondent and co-respondent have not provided any undertakings to the applicant that (a) the change of the respondent company name will be permanent (b) they will not in future change the names of other companies under their control to names that include or are similar to MOVEGA REMOVALS or (c) the co-respondent will change the names of those other companies under his control that have, since 22 December 2022, used a name similar to MOVEGA REMOVALS. As such, there is currently no restriction on the respondent changing the respondent’s company name back to MOVEGA REMOVALS, or on the co-respondent adopting, re-adopting or continuing to use a name that includes or is similar to MOVEGA REMOVALS in respect of other companies that he controls;

• If these proceedings were closed at this stage without the order sought by the applicant, the applicant would have no choice but to commence multiple, new proceedings in the Company Names Tribunal, which would result in unnecessary costs and delay;

• The respondent’s change of name is tactical, and it is consistent with other behaviours and comments exposed by Mr Blanche in the course of these proceedings which amount to an abuse of process and justifies an award of costs off the scale.

10. Mr Leonard also explained that the order sought by the applicant is the same order sought with the original application, namely an order pursuant to Section 73(1)(b)(ii) of the Act requiring the respondent and co-respondent 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, the “offending name” for the purposes of the order being one which includes or is similar to the name “Movega Removals”. According to Mr Leonard the fact that the respondent’s company name was changed after these proceedings commenced, from MOVEGA REMOVALS to NEVENA DANIELOVA ZHELEVA LIMITED, does not render the original application without purpose. He also advanced the preposition that the route by which the Tribunal can still make the original application order - despite the name having been changed - is by determining that the original application is upheld pursuant to Section 69(4) of the Act and making the original application order pursuant to Section 73(1)(b)(ii) of the same Act. Further, Mr Leonard stated that the order would have the following effects:

1. the respondent would not be able to re-adopt a company name that includes or is similar to MOVEGA REMOVALS;

2. the companies controlled by the respondent and/or the co-respondent would not be able to adopt and/or re-adopt a company name that includes or is similar to MOVEGA REMOVALS and

3. the companies controlled by the co-respondent that at present use a name that is similar to MOVEGA REMOVALS be changed to non-offending names.

11. Mr Leonard also referred to the applicant’s allegations (and evidence filed in support) that the respondent adopted the name MOVEGA REMOVALS LIMITED in bad faith and to the fact that the co-respondent has adopted names for other UK registered companies that he controls that are the personal names of individual directors of the applicant, namely (a) Filip Biserov Filipov Limited (Company number 10576511), this is the personal name of the CEO, Co-Founder and Director of the applicant; (b) Venelin Todorov Velev Limited (Company number 10981361), this is the personal name of a Co-Founder and Director of the applicant; (c) Pavel Valeriev Vasilev Limited (Company number 10576511), this is the personal name of a Co-Founder and Director of the applicant; (d) Michael Murray Transport (UK) Limited (Company number 10014011), the name Michael Murray is a name associated with the applicant’s business in the UK and (e) Nevena Danielova Zheleva Limited, this is the personal name of an individual involved in the incorporation of the applicant and is the current name of the respondent.

12. Further, Mr Leonard referred to fact that the respondent and co-respondent applied for a trade mark and registered domain names incorporating the name “MOVEGA REMOVALS” (or similar names) allegedly in an attempt to imitate and harass the applicant and cause it damage and invited me to consider the following:

1. That the respondent in its own evidence refers to a company under its control (UK company with number 08197012) adopting the names GIVE US BACK OUR MONEY YOU RASCAL LIMITED and GOT OUR MONEY BACK YOU RASCAL THANKS VERY MUCH LOL LIMITED. Mr Leonard states that the respondent and co-respondent changed the name of this company to send messages intended to harass and intimidate third parties;

2. That the respondents’ own evidence contains the statements below which demonstrates that there is a reasonable prospect that the respondent and co-respondent will adopt, re-adopt or continue to use names for UK registered companies that include or are similar to MOVEGA REMOVALS:

The Respondent is perfectly entitled to call whatever company he likes and by whatever name he likes” (paragraph 1.3.2B of the First Counter Statement of the Applicant’s Director at page 18;)

Without a Judgment of [or] Order in the Applicant’s hands, [the applicant] cannot make any such complaints” (paragraph 1.3.2B of the First Counter Statement of the Applicant’s Director (page 18));

The Respondent points out that any companies with supposed offending names are completely separate entities and should be challenged separately via new Applications via the IPO … which the Respondent will have great pleasure in Defending” (paragraph 1.0.9 of the First Counter Statement of Philip Leonard (page 5)).

13. Finally, Mr Leonard sought directions to add the additional offending companies to these proceedings. At the hearing I asked Mr Leonard which provisions he relied upon to achieve that result. In response to my question, he stated that he relied on the following provisions:

(i.) The provision conferring on the Adjudicator the power to give such directions as to the management of the proceedings as he or she thinks fit pursuant to Section 6(2) of the Company Names Adjudicator Rules 2008;

(ii.) The provision conferring on the Adjudicator the power to direct a document to be filed or to be copied to a party to proceedings within a specified period pursuant to Section 6(2)(a) of the Company Names Adjudicator Rules 2008;

(iii.) The provision conferring on the Adjudicator the power to consolidate proceedings pursuant to Section 6(2)(g) of the Company Names Adjudicator Rules 2008.

14. Mr Leonard requested that I use my case management powers to direct that the applicant files a CNA1 in respect of the additional offending companies, and once filed, consolidate the new cases with these proceedings.

15. As regard to costs, Mr Leonard submitted that if I decide to close the case now, the applicant should be awarded off-scale costs in the amount of £14,264, which is full compensation for the amount incurred by the applicant due to the respondent and co-respondent’s unreasonable behaviour.

16. Mr Blanche confirmed that he opposed the applicant’s requests and he agreed with the preliminary view to close the case. In separate correspondence, he also challenge the award of costs as he pointed out the applicant did not warn the respondent that he would start legal proceedings against it.

Decision

17. Section 73 of the Act states:

Order requiring name to be changed
(1) If an application under section 69 is upheld, the adjudicator shall make an order-
(a)requiring the respondent company to change its name to one that is not an offending name, and
(b)requiring all the respondents
(i)to take all such steps as are within their power to make, or facilitate the making, of that change, and
(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.

(2) 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-
(a)to be the subject of a direction under section 67 (power of Secretary of State to direct change of name), or
(b) to give rise to a further application under section 69.

(3) The order must specify a date by which the respondent company’s name is to be changed and may be enforced-
(a)in England and Wales or Northern Ireland, in the same way as an order of the High Court;
(b) in Scotland, in the same way as a decree of the Court of Session.

(4) If the respondent company’s name is not changed in accordance with the order by the specified date, the adjudicator may determine a new name for the company.

(5) If the adjudicator determines a new name for the respondent company he must give notice of his determination-
(a) to the applicant,
(b) to the respondents, and
(c)to the registrar.

(6) For the purposes of this section a company’s name is changed when the change takes effect in accordance with section 81(1) (on the issue of the new certification of incorporation).

18. This case is rather unusual because although the respondent has changed the offending name during the course of the proceedings, I am still asked to uphold the application under Section 69 and issue an order under Section 73(1)(b)(ii), requiring the respondent’s company 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. However, I am not persuaded by Mr Leonard’s reasoning.

19. The explanatory notes to the Act contain the following comments in relation to Section 73:

Section 73: Order requiring name to be changed

174. This section is a new provision. If an objection made under section 69 is upheld, then the adjudicator is to direct the company with the offending name to change its name to one that does not similarly offend. A deadline must be set for the change. If the offending name is not changed, then the adjudicator will determine a new name for the company.

20. The first question for argument and construction is whether Section 73(1)(a) and 73(1)(b) are conjunctive or disjunctive. Mr Leonard requested an order under Section 73(1)(b)(ii) only. However, the issuing of such an order as a standalone order would be possible only if the order envisaged by Section 73(1)(b)(ii) was independent from the order envisaged by Section 73(1)(a). Unfortunately for the applicant, I do not think that it is the case. In my view the provisions contained in Section 73(1)(a) and (b)(i) and (ii) are conjunctive without a doubt. This makes it impossible for the adjudicator to order a respondent “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” (under Section 73(1)(b)(ii)) without also ordering the same respondent to change its company name to one that is not an offending name (under Section 73(1)(a)).

21. It follows therefore that if the conditions for issuing an order under Section 73(1)(a) are not satisfied, an order under Section 73(1)(b)(ii) cannot me made.

22. Accordingly, I shall start with considering whether Section 73(1)(a) is applicable in this case.

23. In my view the wording of Section 73 can only operate prospectively for the future. It does not appear suitable to cover an act that has already happened. In this connection, the fact that the order requiring the offending name to be changed must also indicate a deadline for the change, reinforces the conclusion that the adjudicator can order the change of name only in respect of a company name that is offending at the time the order is made (rather than at the time the application for the change of name was filed). If the legislator had intended for the order to operate retrospectively (in the sense that the order could be made against the original offending name even if that name is changed during the course of the proceedings), it would not have provided for the order to set a deadline for the change. Further, the language of Section 73 is sufficiently clear to exclude a “retrospective” application of the order, because it would not make sense in the context of the paragraph which expressly refers to the order directing the change of name.

24. Since the offending name has now been changed, the first part of the order contemplated by Section 73(1)(a) (i.e. an order requiring the respondent company to change its name to one that is not an offending name) cannot be made in this case. In addition, the presence of the joining word ‘and’ after Section 73(1)(a) and before Section 73(1)(b) makes the stipulations contained in those paragraph conjunctive, which means that I have no power to make a separate order against the respondent and co-respondent under Section 73(1)(b)(ii) alone.

25. Accordingly, the proceedings have become without purpose and applicant’s primary request not to close the case is refused. It follows that the issue about the consolidation of future applications against the other offending companies and the argument about the applicant having a bona fide reason to seek an order, all fall away.

26. Before moving to the issue of costs, I want to make three important remarks.

27. First, whilst I agree with Mr Leonard that if the case is closed now there is nothing to prevent the respondent and Mr Blanche to file another change of the company name that reverts them to the previous offending name, that cannot overcome the absence of a corresponding power to make the order sought by the applicant in the present circumstances.

28. Secondly, although the parties have made reciprocal accusations, given that the case will not proceed to a substantive decision I will not make any findings in relation to the allegations advanced by each party. I accept that there is a possibility that Mr Leonard’s concerns are well-founded, and that Mr Blanche is on a mission to aggravate the applicant and that he will do what Mr Leonard assumes, i.e. reverts back to the offending name or one very like it once this case is closed. In such circumstances, as it has been acknowledged in the “Corporate Transparency and Register Reform White Paper” (this sets out the Government’s position ahead of introducing new legislation into Parliament which was published in February 2022) due to an existing loophole in the law, Companies House would have no power to stop Mr Blanche and/or the respondent reverting back to an offending name (this is so even if there was a breach of an existing order). However, the fact that there is no remedy at the moment against such conduct, it does not make such conduct legitimate. If, therefore, Mr Blanche’s real intention when changing the respondent’s name was to avoid a decision and/or an order against himself and the respondent, only to revert back to the same or a similar offending name after this case is closed, I would consider such behaviour to amount to an abuse of the current system and I warn him not to do so. At the moment, I am prepared to give Mr Blanche the benefit of the doubt and although some of his comments were wholly inappropriate, I am not convinced that his conduct can be categorised as unreasonable behaviour. However, if another application is made as a result of Mr Blanche and/or the respondent reverting back to the offending name, this Tribunal will consider their conduct to be an abuse of the UK registered companies system, which will be reflected in award of costs off the scale in relation to any future application the applicant will have to make against the respondent. The system is there to be used by legitimate companies not to be abused and manipulated by unscrupulous companies and actors.

29. Thirdly, Mr Leonard said that the new name for the respondent’s company is the name of a person connected with the applicant. The applicant did not claim that there is goodwill in that name, so the issue does not arise. Nevertheless, I want to say that if the applicant had claimed that they had goodwill in the personal name NEVENA DANIELOVA ZHELEVA they could have applied to amend the existing application to substitute that name for the original one in which they claimed a reputation. In those circumstances , the application would then still have a purpose because the new name would be an offending name but as there is no suggestion that that is the case here so I should say no more about it.

Costs

30. As regards the issue of costs, although the issue was not discussed at the hearing, I have reviewed the CNA1 following Blanche’s post-hearing comments that the applicant should not be awarded any costs, due to the fact that they did not warn the respondent that they intended to initiate proceedings. While the applicant requested costs, it answered ‘no’ the question in box 7 (on the CNA1 Form) asking whether they warned the respondent that if they did not change the name, they would start legal proceedings against them. Mr Blanche relied upon Section 10.4 of the Tribunal Practice Direction which is as follows:

10.4 Undefended applications

10.4.1 If an application is undefended, an award of costs is likely to be made against the respondent, provided a request for costs has been made by the applicant and pre-action enquiries have been made, and provided the application succeeds. It should be noted, however, that the adjudicator will not normally award costs to the applicant if the respondent, whilst not defending the application, nevertheless satisfies the tribunal that it did not receive any notice, or did not receive adequate notice, that the application would be made. The adjudicator will, likewise, normally not award costs if the applicant indicates in box 7 of the application form (CNA1) that it did not contact the company prior to making the application.

10.4.2 If there is no indication (or there is inadequate indication) on the application form as to whether reasonable pre-action contact was made, the adjudicator may request information from the applicant prior to considering whether an award of costs is appropriate”

31. The rule covers situations whereby a respondent having been served a CNA1, it decides not to file a defence or applies to change the alleged offending name voluntarily. A similar provision is contained in the guidance “Objecting to other people’s trade marks and the legal costs” which states:

If you decide to withdraw your application after we have received an opposition you will have to pay costs to the opponent. But, if you have demonstrated that proceedings were launched against you with no warning, giving you no chance to negotiate or reach a compromise without legal proceedings then there will be no award of costs issued against you.

If you decide to defend your application against the opposition and lose the case, you will be required to pay costs to the opponent.

32. This confirms my impression that the rule about undefended applications is there to cater for situations whereby the respondent having decided not to file a defence or having changed the alleged offending name voluntarily after it was given notice of the application, it is reasonable to assume that had the applicant warned the respondent of its intention to start legal proceedings a compromise would have been reached and so it can be concluded that the legal proceedings were unnecessary. The rule clearly refers to undefended applications, and does not provide a general rule applicable to defended cases as it is confirmed by the parallel provisions related to trade marks which provide that if the applicant decides to defend its application against the opposition and loses the case, it will be required to pay costs to the opponent (regardless of whether it was warned or not). Hence, I reject Mr Blanche’s objection and I confirm the preliminary view to close the proceedings and award the applicant £1,450.

Conclusions

33. For all of the above reasons, the preliminary view to close the case and award the sum of £1,450 to the applicant is confirmed.

Appeal

34. Section 74 of the Act which states:

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

35. See the About us guidance published which contains the following:

Appealing an adjudicator’s decision

If you disagree with the decision made by the adjudicator, you can appeal to the High Court of England and Wales, the High Court of Northern Ireland or the Court of Session in Scotland. An appeal can be made only against a decision to uphold or dismiss an application made under section 69 of the Companies Act 2006.

36. As my decision to confirm the preliminary view to close the case and award costs to the applicant is not a decision that uphold or dismiss an application under Section 69, it cannot be appealed.

37. Hence, I order NEVENA DANIELOVA ZHELEVA LIMITED (formerly MOVEGA REMOVALS LIMITED) and Daniel Blanche, being jointly and severally liable, to pay MOVEGA REMOVALS LTD the sum of £1,450. This sum is to be paid within twenty-one days of the expiry of the period allowed for appeal or, if there is an appeal, within twenty-one days of the conclusion of the appeal proceedings (subject to any order of the appellant tribunal).

Dated 27 March 2023

Teresa Perks
Company Names Adjudicator