Decision

Decision on Omega Solutions Recruitment Limited

Published 18 June 2024

Company Registration Number 14321567 in the name OMEGA SOLUTIONS RECRUITMENT LIMITED (the Primary Respondent)

Application Number 4571 by STAFFLINE RECRUITMENT LIMITED T/A OMEGA (the Applicant)

Decision on costs

1. This short decision confirms the outcome of the hearing on costs held before me on 10 June 2024 via Teams. The hearing had been requested by Emmanuel Avorga, who is the co-Respondent in these proceedings, and was attended by Mr Avorga and by Steven Bell of the Applicant. An outline of the chronology provides a useful context against which to record and explain my decision.

1.	24 October 2023	The Applicant, Staffline Recruitment Limited, sent a letter to Mr Avorga, at Omega Solutions Recruitment Limited (the Primary Respondent) at the address it gleaned from the Companies House register. The letter informed Mr Avorga that the Applicant’s trading name is Omega and that the Applicant owns a trade mark for Omega in respect of recruitment services. The letter requested that Mr Avorga arrange to change the name of his company to one that it is a non-offending name, else the Applicant would pursue the matter through the company names tribunal, giving rise to potential liability for costs. It stated that such costs could be avoided if the name were changed voluntarily within 14 days of this letter of notice.
2.	16 November 2023	Having received no response to its letter of notice, the Applicant filed a Form CNA1, with its £400 associated fee, initiating proceedings before the company names tribunal.
3.	28 November 2023	The tribunal caseworker wrote to the Primary Respondent, serving the Form CNA1. The letter set a deadline for the Primary Respondent to file a Form CNA2 if it wished to defend the name change application. The letter stated: If you decide not to defend your company name, the application will normally succeed. A decision in favour of the applicant will normally include an award of costs in favour of the applicant, provided costs have been requested by the applicant. If you inform the tribunal that you did not receive adequate notice that an application would be made before it was filed, the tribunal will normally not award costs to the applicant. If you are not defending the application and you consider that you did not receive adequate notification from the applicant before the filing of the application, you should inform the tribunal on or before the date for the filing of the defence. Once an order is issued by the tribunal the adjudicator cannot revisit any costs issues.
4.	25 December 2023	Mr Avorga sent an e-mail to the tribunal with copy to the Applicant, stating that he never received a warning letter, and speculated that it might have been delivered to a neighbouring street of similar name or simply been lost in post.  He stated that he did not intend to defend the company name, but denied any knowledge of the Applicant or any intent to cause confusion.
5.	23 January 2023	The tribunal wrote with a standard letter informing the parties that as no CNA2 had been filed by the deadline, in accordance with Rule 3(4) the adjudicator may treat the application as not being opposed and may make an order (for a change of name) under section 73(1) of the Companies Act 2006.  It gave the Primary Respondent 14 days to request a hearing.
6.	29 February 2023	The Applicant, at the request of the tribunal provided the tribunal with a scanned copy of the letter that it had sent to the respondent. The applicant also provided the Royal Mail tracking number.
7.	17 March 2023	Mr Avorga emailed the Tribunal, with copy to the Applicant, highlighting that his email of 25 December 2023 (item 4 above) had stated that he did not intend to defend the company name change application. Mr Avorga’s email informed the Applicant and the Tribunal that he had applied to close down his company through voluntary strike-off from the register of companies, and he attached the Form DS01 taking that step. I note that the register of company names confirms that this step was indeed taken on 17 March 2024, and the company is shown to be dissolved via voluntary strike off as of today’s date (11 June 2024). Mr Avorga expressed his hope that this step satisfied matters and that the proceedings may therefore be concluded.
8.	19 March 2023	The tribunal gave its preliminary view to issue an Order under Section 73(1) of the Companies Act 2006, ordering a change of name. The tribunal considered that the Applicant had provided adequate notice to the Respondent prior to making the application and therefore should be entitled to a contribution towards its costs. The tribunal noted the Respondent’s comments of 25 December 2023, but considered that the Applicant had attempted to ensure effective communication to the Respondent. The Applicant had provided the Tribunal with a copy of its pre-action letter and which it had originally sent that to the Respondent by tracked post on 24 October 2024. The preliminary view concluded therefore that although the Respondent maintained that it did not receive the letter, this ought not in the circumstances to prevent the Applicant from receiving its costs.
9.	19 March 2023	A letter from the caseworker stating that Emmanuel Kwaku Gyamfi Avorga has been joined co-respondent (as requested in the Applicant’s Form CNA1) and that he was therefore jointly and severally liable with the Primary Respondent for the costs in the proceedings.  It stated that if Mr Avorga disputed this decision, then in accordance with rule 5(3) of the Company Names Adjudicator Rules 2008 he may, by 2 April 2024, request to be heard by filing a Form CNA4.
10.	12 April 2024	The caseworker informed the parties that in view of the application to strike off company number 14321567 - the name of which is the subject of the present application to the tribunal - the application is potentially without object.  The tribunal was therefore minded to suspend the application, but reiterated its preliminary view that costs were payable to the Applicant in the sum of £600.  It gave the parties until 26 April to request a hearing should they wish to contest the preliminary view.
11.	25 April 2023	Mr Avorga emailed the caseworker to say that he had consulted a solicitor and had “decided not to appeal the costs awarded to the applicant” … but that he wished “to contest your decision to hold me personally liable for this debt. “ His email continued as follows: “The company in question is a limited liability company, which is a separate legal entity from me as a director. While it is permissible to name me as a co-respondent in the proceedings, this does not inherently make me legally liable for the debt incurred in this case, contrary to what you suggested. I have taken responsibility and responded promptly to all correspondence, that required my attention, since I became aware of this case. In my initial response, I informed you that I did not intend to contest the applicant’s claim since the company was not trading. Thus, changing the company name at anytime wouldn’t have been an issue. Additionally, I mentioned not receiving the original correspondence from the applicant, so I was unaware of the matter until I received the correspondence from the tribunal, which prevented me from responding to the applicant. Furthermore, I established the company through the government website, which involved a name check to ensure the chosen company name was available. Prior to these proceedings,  I had no knowledge of the applicant’s existence. At no point in the company registration process was I cautioned that choosing a name might result in a conflict with another company over name copyrights. Given that I have fulfilled my duties as a director and cooperated with the proceedings, it is unlawful to hold me personally responsible for the company’s debt. I have confirmed this with my solicitor, Companies House, and government website. I understand my liability as a director is limited to the value of my share in the company, which I am prepared to pay. However, this is the full extent of my legal obligation to the company. I would like to know the legal grounds for holding me personally responsible for the company’s debt merely because I have been named a co-respondent in the proceedings.”
12.	29 April 2023	Mr Avorga filed a Form CNA4 (with £100 fee) requesting to be heard and raising issues around his being joined as a co-respondent, not having received adequate prior notice of the name change application and reiterating that he did not wish to defend the company name.

A hearing was convened and rearranged to a time and date suitable to both parties.

2. At the hearing, the main issues pursued by Mr Avorga were:

(i) clarification as to whether or not it would have been open to him to have refused to be joined as a co-respondent;

(ii) whether or not it was permissible in law for him to be personally liable for costs, separate from the limited liability of the corporate entity that is the Primary Respondent;

(iii) the claim as to non-receipt of the Applicant’s warning letter

3. In response to the first two of those issues, I explained at the hearing that there are circumstances where it may be possible for an individual to object to being joined in a personal capacity, for instance if their status as recorded in the register of companies were incorrect. However, it is not open to a party simply to decline to be joined as a co-respondent in circumstances where there is a legitimate basis to uphold such a request by an Applicant.

4. Under section 69(3) of the Act any member or director of a respondent company may be joined to proceedings before a company names adjudicator. In the present case, the register at Companies House showed that Mr Avorga was the only person identified in any capacity at the Primary Respondent. He was its sole director and sole shareholder. Its share capital was shown as totalling £1 and Mr Avorga had reported that his company had never traded.

5. 1. It is entirely standard practice for the tribunal to look favourably on an applicant’s request to join one or more individuals as a co-respondent where they appear to be persons with control of the respondent company. Respondent companies in cases before the company names tribunal are very often recently incorporated, may not have traded at all and often have no demonstrable assets. It is therefore appropriate to consider the interests of an applicant, who has been put to the expense of bringing a claim before the company names tribunal, in having a named individual against whom any costs order may be pursued even in the event that a primary respondent were to cease to exist as a legal entity. ^{[footnote 1]}

6. I turn next to the third of the issues listed at paragraph 2 above.  In his email of 25 April 2023 (item 11 in the table above), Mr Avorga had reported his decision not to appeal the costs awarded to the Applicant, and that he took issue only with his being held personally liable as co-Respondent. However, at the hearing Mr Avorga returned to his position that he had not received the warning letter; he sought therefore to rely on the tribunal’s message in its letter of 28 November (item 3 in the table above) that if he informed the tribunal that he had not received adequate notice before an application was filed, the tribunal would not normally award costs to the applicant.

7. At the hearing, Mr Avorga acknowledged that the Royal Mail tracking number provided by the Applicant was indeed linked to a delivery made at 11.14 on 25 October 2023 to the correct address of Mr Avorga and the Primary Respondent. He also stated that the signature recorded, which read “Avorga”, was that of his (now) wife.

8. However, Mr Avorga claimed that there had only been one item of post delivered on that date, which was an order of vitamins, and it was in respect of that delivery that his wife had provided her signature. There was no evidence before me to corroborate that account, though Mr Avorga stated that his wife had proof to that effect. I gave my view that it seemed very odd that a letter sent with a particular tracking number provided to the Applicant, could somehow have become attached to an entirely separate order sent by a third party in respect of vitamins, leaving the Applicant’s letter undelivered, yet recorded as delivered.

9. I also gave my view even if Mr Avorga were able to establish that such an unusual mix-up had taken place, the balance of fairness remained tipped in favour of the Applicant. The Applicant had not simply put a letter in the standard post - a step which may itself be prima facie evidence of effective notice - but had taken the additional reasonable and prudent step of sending it with tracked delivery. The Applicant’s understanding, on consulting the information linked to it allocated Royal Mail tracking number, would have been that the tracked letter had been successfully delivered to the correct address and duly signed for in the name of Avorga. In those circumstances, the Applicant can very fairly be considered to have made best endeavours at providing notice of the requested change of company name. The Applicant filed a Form CNA1 around 3 weeks following that signed receipt, having had no contact from the recipient. I uphold the view given in the tribunal letter of 19 March 2024 (item 8 above) that the Applicant provided adequate notice to the Respondent prior to making the application and therefore should be entitled to a contribution towards its costs.

10. It is regrettable that the co-Respondent faces a costs order for several hundred pounds, since there is no reason to believe that he acted with any knowledge of the Applicant business or with any intent to exploit or cause confusion. He responded in a timely manner to the Form CNA1, not seeking to defend the application and then dissolved his company. However, for the reasons I have given, a costs order is warranted in favour of the Applicant who had to complete and file the Form CNA1, and pay the £400 official fee.  I note that Mr Bell also attended the costs hearing that had been requested by the Applicant. Mr Bell made concise and fair points at the hearing, but the Applicant was not required to make any written submissions. I make no additional award in respect of the Applicant’s attendance at the hearing, since the Form CNA1 content was brief and I consider the £200 sufficient to cover both its completion and Mr Bell’s attendance of the hearing.

11. Since the Primary Respondent is recorded as dissolved by voluntary strike-off as of today’s date, I order Emmanuel Kwaku Gyamfi Avorga to pay Staffline Recruitment Limited costs in the sum of £600 on the basis indicated above, to be paid by 28 June 2024.

12. Section 74(1) of The Companies Act 2006 provides for an appeal to the court “from any decision of a company names adjudicator to uphold or dismiss an application under section 69”. The present decision is not such a decision. There is no right of appeal in respect of this costs order.

Matthew Williams
Company Names Adjudicator
Dated: 13 June 2024

1. (It is also the case that in situations where a name change order is made it will require the agency of an individual or relevant individuals within that corporate entity to action a change of name.) ↩