Decision

Decision on Subway IP Ltd

Updated 13 November 2020

Companies Act 2006

In the matter of application No. 3088 by SUBWAY IP LLC for a change to the company name of SUBWAY IP LTD, a company incorporated under number 12177070

Undefended application

1. The company name SUBWAY IP LTD (“the primary respondent”) has been registered since incorporation on 28 August 2019 under number 12177070.

2. By application filed on 3 December 2019, SUBWAY IP LLC (“the applicant”) applied under section 69(1) of the Companies Act 2006 (“the Act”) for the primary respondent’s name to be changed.

3. A copy of this application was sent to the primary respondent’s registered office on 20 December 2019, in accordance with rule 3(2) of the Company Names Adjudicator Rules 2008. The copy of the application was sent by Royal Mail “signed for” service. It was returned marked “not at this address R.T.S.”. A copy of the application was also sent by ordinary post. This was also returned. Also on 20 December 2019, the Tribunal wrote to Dr Guido Savio and Dr Rafelina De Jesus Abad at addresses in Moscow and Panama, respectively, to inform them that the applicant had requested that they be joined to the proceedings. No comments were received from them in relation to this request and on 23 January 2020 they were both joined as co-respondents. On the same date, the parties were advised that no defence had been received to the application and so the adjudicator may treat the application as not being opposed. The parties were granted a period of 14 days to request a hearing in relation to this matter, if they so wished. Once again the letter to the primary respondent was returned (and marked “no office number R.T.S.”). No request for a hearing was made.

4. The primary respondent did not file a defence within the period specified by the adjudicator under rule 3(3). Rule 3(4) states:

The primary respondent, before the end of that period, shall file a counter-statement on the appropriate form, otherwise the adjudicator may treat it as not opposing the application and may make an order under section 73(1).

5. Under the provisions of this rule, the adjudicator may exercise discretion so as to treat the respondent as opposing the application. In this case I can see no reason to exercise such discretion and, therefore, decline to do so.

6. As the primary respondent has not responded to the allegations made, it is treated as not opposing the application. Therefore, in accordance with section 73(1) of the Act I make the following order:

(a) SUBWAY IP LTD shall change its name within one month of the date of this order to one that is not an offending name ^{[footnote 1]};

(b) SUBWAY IP LTD, Dr Guido Savio and Dr Rafelina De Jesus Abad 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.

7. 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.

8. In any event, if no such change is made within one month of the date of this order, I 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.

9. 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

10. The applicant may be entitled to an award of costs in circumstances such as in the present case where the application is not defended.

11. On 9 July 2020, the Tribunal informed the parties that the case will go forward for an undefended decision and that its preliminary view was to decline to make an award of costs because the primary respondent did not receive adequate notice that the application would be made. Similar letters were also issued on 13 August 2020 because it had been noticed that there was a change of address of the primary respondent on the Companies House register on 2 June 2020.

12. The applicant challenges this preliminary view and requested to be heard. The hearing took place on Thursday, 24 September 2020 where the applicant was represented by Mr David Hansel for Hansel Henson Limited, the applicant’s representative in these proceedings. The respondents did not attend or provide any submissions in lieu of attendance.

13. Mr Hansel’s submissions in support of an award of costs being made can be summarised as follows:

• the applicant’s Form CNA1 identified the application as being part of a systematic series of abuses involving registering company names that are identical to well-known US franchise companies;
• the Tribunal has discretionary power to award costs ^{[footnote 2]};
• given the potential for commercial harm to the applicant, the notice given to the primary respondent was reasonable, and;
• in the High Court, a successful applicant for an interim injunction in relation to a company name registration will still be entitled to their costs if successful and the court decides to exercise its discretion in relation to costs.

14. At the hearing, I drew Mr Hansel’s attention to Box 7 of the applicant’s Form CNA1 where, in response to the question “Did you warn the company that if it did not change its name that you would start legal proceedings against it? If ‘yes’, when did you warn the company”, it was stated:

Yes, A letter requesting the renaming of Subway IP Limited was sent to the Registered Office of Subway IP Limited, as well as the correspondence address (in Panama) shown on Companies House of the sole director Dr Rafelina De Jesus Abad, on 27 November 2019. We were notified this morning by our courier that they were unable to locate the director at the address given on Companies House.

15. At my request, the applicant provided ^{[footnote 3]} a copy of the notification from its courier referred to above under cover of a short witness statement. This statement referred to:

(i) a letter to the primary respondent’s sole director, Dr Rafelina De Jesus Abad sent on 27 November 2019. Exhibit JD2 shows a postage label recording a collection date of 27 November 2019 by its courier from Hansel Henson Ltd to Dr Rafelina De Jesus Abad at an address in Panama;

(ii) Hansel Henson Limited received an email update from the courier company recording that on 3 December 2019 it was “unable to deliver to consignee” to Dr De Jesus Abad. This email is provided at Exhibit JD3;

(iii) The letter sent to the primary respondent’s registered office being returned. At Exhibit JD4 is an image of part of an envelope with part of its contents visible through the address window where the text “We act on behalf of Subway IP LLC …. “SUBWAY” (Subway IP”), in respe…” is visible. The envelope carries a post mark dated “27/11/19”, a label illustrating that it was sent “signed for” delivery and the hand written message “not at this address R.T.S.”. There is no indication of the date it was returned;

(iv) The fact that Hansel Henson Limited has never had any contact from anyone on behalf of the respondents.

16. The Company Names Tribunal practice direction states the following:

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.

17. The requirement for making a pre-action enquiry has clearly been met by the applicant. Further, it did not commence proceedings before the tribunal until it had received confirmation from its courier that its pre-action letter could not be delivered to Dr Rafelina De Jesus Abad. Its letter to the primary respondent was also returned. In these circumstances, it was reasonable for it to commence proceedings. I am fortified in this view by the fact that the applicant strongly suspected that it would receive no response and that the subsequent absence of engagement by the respondents in these proceedings gives support to this suspicion being correct.

18. Taking all of the above into account, whilst I recognise the short period between issuing the pre-action letters and commencing proceedings before the Tribunal, it was justified on this occasion. The applicant considered it a matter of urgency to stop what it perceived as fraudulent action that was part of a pattern of behaviour. Again, the respondents’ lack of engagement in these proceedings has not dispelled this perception. Proceeding were only commenced after receiving information that at least one of the two pre-actions letters could not be delivered.

19. In light of all of this, I reverse the Tribunal’s preliminary view. SUBWAY IP LLC, having been successful in respect of both the substantive case and in its challenge to the preliminary view not to award costs, is entitled to a contribution towards its costs. I order SUBWAY IP LITD, Dr Guido Savio and Dr Rafelina De Jesus Abad, being jointly and severally liable, to pay costs on the following basis:

Fee for application: £400
Statement of case: £400

Total: £800

20. This sum is to be paid within seven days of the expiry of the appeal period or within seven days of the final determination of this case if any appeal against this decision is unsuccessful. There is no right of appeal in relation to costs.

21. Any notice of appeal against this decision to order a change of name must be given within one month of the date of this order. Appeal is to the High Court in England, Wales and Northern Ireland and to the Court of Session in Scotland.

Dated 6th October 2020

Mark Bryant
Company Names Adjudicator

1. 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. ↩

2. In rule 11 of the Company Names Adjudicator Rules 2008 ↩

3. Under cover of Joseph Doughty’s email dated 28 September 2020 ↩