Decision

Decision on Hebridean Spa Holidays Ltd

Published 26 March 2024

Companies Act 2006

In the matter of application No. 3998 by Hebridean Spa Ltd for a change to the company name of Hebridean Spa Holidays Ltd, a company incorporated under number SC706469

Background, Claims and Defences

1. HEBRIDEAN SPA HOLIDAYS LTD (“the Respondent Company”) was incorporated on 12 August 2021 and registered at Companies House under Company No. SC706469.

2. On 23 August 2022 Hebridean Spa Ltd (“the Applicant”), filed a Form CNA 1 in application to the Company Names Tribunal for an Order under section 69 of the Companies Act 2006 (‘the Act”) to change the name of the Respondent Company.  The Applicant’s legal representative, Cloch Solicitors Limited, had sent a letter before action on 14 July 2022 to Finlay Maclennan, sole director of the Respondent Company.  At the request of the Applicant, Finlay Maclennan, was joined as co-Respondent. ^{[footnote 1]}

Applicant’s claims

3. The Applicant claims to be located in Stornoway (which is on the Isle of Lewis, part of the Outer Hebrides archipelago in Scotland) and to have traded under its name from at least 25 November 2011 and that “its business includes the manufacture of the world-famous cosmetics brand ISHGA”.  It claims goodwill associated with the names “Hebridean Spa” and “Hebridean Spa Limited” and that the name of the Respondent Company is the same as those names, or else sufficiently similar that its use in the UK would be likely to mislead by suggesting a connection between the Respondent Company and the Applicant.  The field of business in which the Applicant claims goodwill or reputation is “business support service activities, including the commercialisation of skin care and cosmetics products, namely to spas, hotels and other holiday and collective accommodation.”  The Applicant requests that the Respondent Company change its registered name to one that is not an offending name, and requests an award of costs.

Respondent Defences

4 The Respondent Company filed a Notice of Defence (Form CNA 2), dated 5 October 2022, signed by Finlay Maclennan. The Form named Angus Nicolson as the representative and contact for the Respondent Company.  It is convenient at this stage to set out certain points from that Form CNA 2.  I do this in greater detail than may be ordinary practice, because, as will be seen, the content of the Form CNA 2 has a bearing on the particular evidential path of these proceedings.  (This decision also includes additional detail in account of various correspondence between the Tribunal and the Applicant’s representative, since those exchanges are relevant in establishing the procedural fairness of the Tribunal’s handling of this name change application – a matter that has been raised by the Applicant’s representative - and also have a bearing on costs awarded in this decision.)

5. In response to Question 1 of the Form CNA 2, the Respondent Company agreed that the Applicant has a reputation in the manufacture and wholesale of skincare and cosmetic products, but submitted that this is exclusively under the brand name ISHGA, and not under Hebridean Spa or Hebridean Spa Ltd.  It denied that there could be any misrepresentation or confusion between the Applicant and Hebridean Spa Holidays Ltd.  The account of which points the Respondent admits, denies or required the Applicant to prove, continued in the following response to Question 2:

Hebridean Spa Holidays Ltd operates a dedicated spa facility in one location in the Hebrides.  There is no retail operation and only incidental products such as food and drink are available to customers.  It is denied that the applicant has any goodwill in any area that overlaps the business of Hebridean Spa Holidays Ltd.  The applicant has not demonstrated how any goodwill they have would be affected by the operation of a spa facility.  The applicant has a reputation in the manufacture and wholesale of skincare and cosmetic products, but does not provide either holiday or spa services.  The applicant is a manufacturing business producing product under the trading name of “ishga” for wholesale sale to hotels and specialist spa facilities.  It retails cosmetic products to the general public via the ishga website.  The applicant has not demonstrated how any confusion or tarnishment of reputation could arise given the businesses operate in different spheres.

The applicant is using the branding of ishga …  There is no suggestion that the applicant intends to, or has, extended the brand in any direction or adopted any other marketing name.  An attached internet search for product using the term “Hebridean Spa” returns absolutely no matching results on the first page, suggesting that the branding is not important to the applicant.  Later pages return ishga branded products probably based on a match of the geographic descriptor “Hebridean”.

6. The response to Question 3 in the Form CNA 2 indicated reliance on the following three defences:

(i). that the Respondent Company is operating under the name, or is proposing to do so and has incurred substantial start-up cost in preparation (section 69(4)(b) of the Act); ^{[footnote 2]}

(ii). that the name was adopted in good faith (section 69(4)(d) of the Act);

(iii). the interests of the Applicant are not adversely affected to any significant extent (section 69(4)(e) of the Act).

7. The Form CNA 2 then asks that respondents “provide relevant information to support your defence.”  The Respondent provided the additional following statements:

Formation

The company was formed in the normal manner and the Registrar of Companies did not adjudge that the company name was as “same as” name to any existing registered company.

Costs incurred to date

The company has incurred costs in excess of £100,000 in establishing the spa facility in the premises including equipment and structural changes

Difference in operating spheres

There is no possibility of confusion between a small spa facility which does not sell cosmetic products and a specialist manufacturing company retailing cosmetic products via a website and via specialist spa facilities.

Failure to market the company name

A director of the applicant has recorded his directorship of Hebridean Spa Ltd on LinkedIn, the networking site.  It appears that no page has ever been created for Hebridean Spa Ltd on LinkedIn and that no posts have ever been made about Hebridean Spa Ltd as shown on the attached.  The LinkedIn page for ishga Skincare has numerous posts and describes the business as “Personal Care Product Manufacturing”.

Geographic identifier

The respondent’s company name accurately describes the business, giving an accurate geographic indicator followed by an accurate descriptor of the activities.  There are around 50 companies registered at Companies House which use the descriptor “Hebridean” to identify the area in which the company operates or it is based.

Documents in support of the defence

8. The filed Form CNA 2 then referred to further information and attached documentation (around 30 pages of it) stated to be in support of the defence.  I shall refer in this decision to relevant parts of both parties’ documentation and information to the extent I consider warranted.  For now, I note that the documents attached to the Form CNA 2 included screenshots of an email exchange between the parties:  an email of 24 March 2022 from Kristine Maclennan (wife of Finlay Maclennan) to Malcolm Macrae (malcolm@ishga.co.uk); and Mr Macrae’s reply on 13 April 2022 (from his ishga email address).

9. Mrs Mclennan’s email includes the following content:

(i). She was following up on a discussion with one of ishga’s employees about Mrs Maclennan’s hope of having ishga-branded based products in her Hebridean gift boxes, noting a lack of premium gifts available locally to include in the boxes so she “thought ishga would fit in very well, being local and very popular products that could work well with other island-based products to create bespoke Hebridean-themed gift boxes.”

(ii). “ … my husband Finlay has been working on developing a health and wellbeing spa last while in Tong.  We are hoping to open that in late May to early June under Hebridean Spa Holidays.  We are both keen for the massage and facial treatments that will be provided by local masseuses working with us, to be done using ishga products.  Would it be okay for Finlay to get in touch with you once he has some free time to showcase the plans, business plan and explain over it all to see if it would be of interest to you?” (my underlining)

10. The email reply from Mr Macrae, on his return from holiday in April 2022, included the following:

(i). After discussion with his sales and marketing team, involvement in Mrs Maclennan’s proposals was not currently of interest;

(ii). “our professional ishga treatments are currently used exclusively on the island by my wife Joanna and her colleagues at our treatment room at our premises in Stornoway and we want to retain this exclusivity as we do have our own plans for an ishga spa sometime in the future. (my underlining)

(iii). “I would like to take this opportunity to wish you all the very best with your gift box business and your health and wellbeing spa when it opens.” (my underlining)

Applicant’s evidence in chief

11. On 26 October 2022, Philip Hannay, of Cloch Solicitors, filed a Form CNA 3 Notice of Giving Evidence, which comprised a “First Witness Statement of Malcolm Robert MacRae” with 13 exhibits (totalling around 77 pages).  Mr Hannay indicated in the form that the Applicant did not intend to file more information at that stage, but that further evidence may be filed in reply to the Respondents’ evidence and submissions.  He also filed written submissions dated 26 October 2022 alongside the Applicant’s evidence.

12. The evidence rounds were progressed according to the usual timeframes, and the conclusion of the evidence rounds was communicated to the parties by the caseworker’s letter dated 24 January 2023.  It included a deadline of 21 February 2023 for the parties to file submissions in lieu of an oral hearing, at which point a decision would be made “from the papers”.

Reopening of evidence rounds

13. On 25 July 2023, the Tribunal wrote to the parties with the following view:

“Having consulted the electronic case file to start to draft his decision, the adjudicator has noticed an issue that appears to necessitate re-opening the evidence rounds.  > This is regrettable, especially as the decision would ordinarily (in less busy times) have been due to be issued in May 2023.   However, the adjudicator considers it the most appropriate course of action and warranted in the interests of fairness.   The following explains the nature of the issue. > The official letter dated 24 January 2023 stated that “a decision can be made from the evidence and any written submissions made by the parties. This “decision from the papers” will involve a thorough analysis of all the evidence and full consideration of any written submissions made by the parties.” 

However, as Mr Hannay points out in his written submissions dated 21 February 2023:

The official letter dated 31 October 2022 gave the primary respondent a period of two months to file any evidence in support of its company name.    No evidence has been received by the Tribunal by the deadline set.  As such, the evidence rounds are now concluded.”

The letter then provided “a list of the evidence filed in these proceedings” which identified only: Witness Statement Malcolm Robert MacRae with exhibits 1 to 13.

On the basis of the above, Mr Hannay states at paragraph 4 of his written submissions that “… the Respondents rely on three defences:  namely, ss. 69(4)(b), (d) and (e).  The burden of proof in each defence is wholly on the Respondents.  Given the Respondents have not filed any evidence; there is no possibility of any defence.”

Mr Hannay’s position may be considered a logical consequence based on a strict interpretation of the content of the official letter.   However, the adjudicator considers that the official letter failed to set out a thorough account of the relevant evidential materials filed by the parties.

In response to the Applicant’s filing a Form CNA1, the Respondent filed its defence on a Form CNA2, which was received by the tribunal on 10 October 2022.  This step would ordinarily lead to the tribunal writing to the parties to confirm service of the Form CNA2 and allowing the Applicant 2 months to file evidence first.  However, in this case, the Applicant filed its evidence (along with a Form CNA3) on 26 October 2022, before the tribunal wrote to advise of that usual next step.  This slight out-of-stepness was acknowledged in the official letter of 31 October 2022.  That letter … gave the Primary Respondent two months to file any evidence that it wished to file in support of its company name. 

What was not pointed out in the correspondence from the office was that the Respondent had included in its Form CNA2 a statement in support of its company name, making various submissions and factual claims and materials of an evidential nature.  Since the CNA2 is given under a signed and dated statement of truth, its content has evidential significance before the tribunal. 

As part of its defence, the Primary Respondent states in its Form CNA2 that under its name it operates a dedicated spa facility in the Hebrides and has incurred start-up costs “in excess of £100,000 in establishing the spa facility in the premises including equipment, structural changes”.   It includes an email dated 24 March 2022 (directed to the Applicant), referring to the business of the Primary Respondent being” about a year old” at that date. ^{[footnote 3]} The Applicant’s own evidence also refers to the business operation of the Primary Respondent. ^{[footnote 4]}

The Primary Respondent also claims a defence of good faith, claiming that “the respondent’s company name accurately describes the business, giving an accurate geographic indicator followed by an accurate descriptor of the activities.  There are around 50 companies registered at Companies House which use the descriptor “Hebridean” to identify the area in which the company operates or it is based”. 

It is noted that the witness statement on behalf of the Applicant does not address the above claims made in the CNA2.   Mr Hannay’s written submissions indicate that the Applicant has proceeded on the basis that the Primary Respondent has filed no evidence and that consequently “there is no possibility of any defence”.  This letter clarifies that this is not a position that the tribunal shares.

In the circumstances, the adjudicator considers that the Applicant should be afforded an opportunity to file evidence in reply to the matters of fact put forward in the Respondent’s Form CNA2.  The Applicant therefore has one month from the date of this letter to indicate whether it wishes to do so, that is on or before, 25 August 2023.  Once the Applicant’s position in that regard is confirmed, the tribunal will proceed with its decision.

The tribunal also notes that as of 11 July 2023, the register at Companies House shows an active proposal to strike off.    Both parties are invited to confirm to the tribunal as soon as possible whether that strike off proposal inclines either party to continue or discontinue these company name change proceedings.”

14. In response to the above official letter, Mr Hannay signalled his deep disappointment, but confirmed that the Applicant would file further evidence.

Applicant’s further evidence

15. The Applicant filed a second witness statement from Mr MacRae, dated 8 August 2023 (with Exhibits HEB 14 and HEB 15), giving evidence that:

(a) until 31 July 2023 the Primary Respondent was registered at an address in Glasgow, which is 200 miles away from the Hebrides, and the witness submits that use of “Hebridean” was therefore “entirely misleading”;

(b)  Companies House register showed dormant accounts filed for the Primary Respondent for the period from incorporation to 31 August 2022.  The accounts are dated 31 July 2023, signed by Finlay Maclennan and do not show the investment claimed in the defence.  

From this Mr MacRae concluded that the Primary Respondent has never traded.

Applicant’s submissions in chief

16. In his 8 August 2023 covering email, filing the above evidence, Mr Hannay also pointed out that insofar as the “Tribunal’s letter appears to suggest that the Respondent’s asserted positive defence has not been addressed … the Tribunal is directed to the Applicant’s submissions dated 26 October 2022 and paragraphs 9-18 in particular.”

17. The end-of-evidence-rounds letter had made no mention of those submissions filed on 26 October 2022, along with the evidence in chief; it listed only the witness statement of Mr Macrae and its 13 exhibits.  Having located them on the electronic case file, I note that the submissions filed on 26 December 2022, reject the operating defence simply for lack of evidence; they reject the good faith defence for lack of an account of the Respondent’s state of mind in choosing the contested name, a lack of name search evidence and on the basis that the Respondent knew of the Applicant’s goods.  The submissions state that the Respondents “have reaffirmed their awareness that the name was being used in connection with the same area as the Respondents purposed to trade (supported by their request for supply of the Applicant’s goods).”  The submissions continued:

“21. No letter of consent was sought from the Applicant.  The Respondents were [sic] flying blind, ignorant of the Applicant’s plans to develop its spa and hotel offering.

22. Worse still, and despite its irrelevance generally, the Respondents admit that they were fully aware that the Applicant’s privy or an Applicant affiliate was operating in the spa and holiday sector, the Respondents were acting wholly opportunistically in registering the name HEBRIDEAN SPA HOLIDAYS LIMITED and subsequently using the mark HEBRIDEAN SPA.”

Update from the Respondent’s representative

18. Shortly before the Applicant filed the Second Witness Statement of Mr Macrae, the Primary Respondent filed a Form CNA7 on 2 August 2023 to appoint Angus Nicolson - but now working at a different address - as its representative, where Mr Nicolson states:

I was taken ill in February, and I have now left Nicolson Accountancy.  It appears that this matter was not dealt with in my absence.  I am ascertaining if I have all the relevant documents, as I am unable to access previous files, and intend to provide a substantive response very shortly.

19. Mr Nicolson failed to copy the Form CNA7 email Mr Hannay, but on 25 August 2023 Mr Nicolson updated the tribunal (this time with copy to Mr Hannay) confirming that the striking-off action had ceased and that the accounts to 31 July 2023 showing the capital expenditure and the trading performance to that date would be “approved and filed at Companies House very shortly”.

Mr Hannay’s objections to permitting evidence or submissions

20. On the same date (25 August 2023) Mr Hannay made the following points by email to the Tribunal:

The Applicant opposes any further submissions or evidence filed by or on behalf of the Respondents on the strongest possible terms.  The Tribunal’s letter of 25 July 2023 did not grant the Respondents leave to do so.  The Respondents have not requested permission to do so.  If any such permission is granted (which it should not) then the Applicant will need to address the same, possibly with further evidence – all to the increased cost, expense, and effort of the action on all parties, including the Tribunal.

The Respondents had long opportunity to file evidence property and in turn.  They did not. Moreover, and in any event, the averments made by Respondents below (even if properly supported) are entirely irrelevant.  The Applicant’s notice was given on 14 July 2022 and the CNA1 filed 23 August 2022.  The Respondents have already filed dormant accounts for the period to 31 August 2022.  Any activity (which is denied) from 1 September 2023 ^{[footnote 5]} to 21 August 2023 or (as shorted [sic] by the Respondent’s recently on 16 August 2023) 31 July 2023 is entirely irrelevant to the relevant dates for which the issues in question must be assessed.

Interestingly, clearly the Respondents now concede that all claimed activity was only undertaken after both the Applicant’s pre-action letter and the CNA1 itself, which glaringly equates to flagrant injurious conduct.

Tribunal directions

21. The Tribunal responded to Mr Hannay’s objection by official letter on 13 September 2023.  That letter gave a brief recap of the stages of the proceedings thus far, before stating as follows:

“6. In determining whether or not the application to change the name of the primary respondent should succeed, an important consideration is likely to involve carefully weighing the evidence before the tribunal with regard to the defences raised.  The second witness statement has raised some questions in challenge to:

(i). the claimed investment expenditure;

(ii). whether the primary respondent was trading when the applicant applied to change its name; and

(iii). the location of the claimed spa operation.

7. The tribunal is sensitive to the unusual reopening of evidence rounds and also notes that the respondents did not file evidence during the initial evidence rounds and have not since expressly requested to do so.  However, since it appears that the respondent’s representative might have been unavailable through ill health and since he has stated an intention to make “a substantive response very shortly”, the Tribunal directs as follows:

• the primary respondent has until no later than 4 October 2023 to file succinct evidence to establish the points at 6(i) – (iii) above.

• evidence filed must be accompanied by a Form CNA3 (with £150 fee).  The primary respondent is to ensure that any evidence it may file - such as witness statement and exhibits - satisfies the required formalities.

• the primary respondent may at the same time furnish brief submissions, but should avoid straying into submissions that go beyond addressing points made on behalf of the applicant.

• any evidence and submission must of course be copied to the other side.

• if / when the primary respondent files evidence / submissions, the applicant will be afforded two weeks from receipt to indicate whether the applicant intends to make a further reply.

If it does, it will have a further two weeks to do so. If it does not, a decision will be made from the papers unless either party requests an oral hearing (accompanied by a Form CNA4 with £100 fee).”

22. Mr Hannay responded to the above letter by email dated 13 September 2023, raising the following points:

Issue 1 - The letter refers to, and exercises a discretion based upon, a form CNA7. First, the Tribunal did not explain the legal basis for the exercise of the discretion in the letter; can that be confirmed please? Second, it appears neither the Respondent’s agent nor the Tribunal ever copied the form CNA7 to this firm (or the Applicant); therefore, the Applicant was prejudiced by not having the full information to comment upon prior to the Tribunal’s consideration to exercise the discretion.

Issue 2 – even if the background in the cover letter and CNA7 is to be believed (which there is no proof to support), and there is a legal basis for the Tribunal’s indulgence (to be confirmed), then the apparently persuading factor outlined in the Tribunal’s letter this morning was that on 2 August 2023 the Respondent’s agent confirmed that the additional material would be supplied “very shortly”.  It is submitted that, if the material was not forthcoming by 13 September 2023, some six weeks later, then the Respondents failed in their very own undertaking to file “very shortly”. The Tribunal’s direction to grant a further three weeks is grossly unfair by the Respondent’s own measurement, particularly as the Tribunal has itself noted – there was even no request to supply the additional material in the first place.

23. Mr Nicolson, on behalf of the Respondent, responded to the above by email on 20 September to address the point about the CNA7.  The email read:

Philip,

I apologise for the oversight in not providing you with the CNA7 form which is attached.  I have not had access to my former work email for some time, and the form CNA7 was submitted as a matter of urgency in response to the letter from the Tribunal dated 25 July 2023.  I did not have access to your email address at that time, and it was a simple oversight on my part.  I understand that my previous email address may have been copied into your submissions, but neither I nor the second respondent have had that information forwarded to us in the interim.  I appreciate that this is unsatisfactory for all concerned, but that is the situation.

24. For its part, the tribunal responded on 14 September 2023 to the issues raised by Mr Hannay, as follows:

Thank you for your email.  

The applicant has sought to change the name of a registered company.  The respondent has stated under a signed statement of truth that it has operated as a company, has incurred significant expenditure and applied for the name in good faith.  The applicant has filed evidence seeking to cast doubt on the respondent’s position. > In the interests of assisting the tribunal in considering the evidential weight in support of either side’s position, it is considered appropriate to afford the respondent an opportunity to respond to the applicant’s second witness statement. The time afforded for that purpose is not considered excessive, noting the stated ill health disruption in representation. > Mr Nicolson is reminded of the importance of copying all correspondence to the other side and must ensure he does so henceforth. > The general powers of the adjudicator under rule 6 of the Company Names Adjudicator Rules 2008 allow the company names tribunal considerable discretion in the conduct of proceedings before it.  It is open to the adjudicator to control the evidence by giving directions, for example: as to the issues on which he/she requires evidence; the nature of the evidence, and the manner in which the evidence is to be filed. > As stated at paragraph 4.2.2 of the Practice Notice, the adjudicator may allow the filing of additional evidence; he/she will decide the time to be allowed after considering the nature of the evidence which is to be filed. Paragraph 5.1.1 of the Practice Notice highlights that under rule 7(1), the adjudicator has discretion to extend (or further extend) any me period, including one which has expired, whether or not a request has been made to extend a time period.”

Mr Nicolson’s evidence

25. Angus Nicolson filed a Form CNA3, signed and dated 30 September 2023 (with the required £150 fee).  It included various attachments and was copied to the Applicant.

26. On 14 October 2023, Mr Hannay confirmed (in line with the directions set out in the official letter on 13 September 2023) that the Applicant intended to make a further reply.  Mr Hannay sent evidence and submissions in reply at around 8pm on 15 October 2023.  On 17 October 2023 the tribunal informed the Primary Respondent as follows:

The Tribunal acknowledges receipt of the Form CNA3 filed, signed by Angus Nicolson and dated 30 September 2023.

The content of that form and its attachments are clearly set out, but the materials filed do not satisfy the formality mentioned in the official letter of 13 September 2023, and the form itself does not contain a statement of truth. It will therefore be necessary for Mr Nicholson to re-present the information in the form of a witness statement, in particular to include a statement of truth.

The materials filed are otherwise acceptable to the Tribunal, since the exhibited content is interwoven with the narrative account.

[…. ]

27. The tribunal letter gave Mr Nicolson 14 days – until 31 October 2023 - to address this evidential formality.

28. It appears that the Applicant’s evidence / submissions in reply sent by Mr Hannay to the tribunal’s general inbox in the evening of 15 October, had not come to the engaged attention of the caseworker when she sent an email to Mr Hannay in the morning of 17 October 2023 relaying the above official letter sent on 17 October 2023 to the Primary Respondent (requiring the addition of the statement of truth).  Consequently, the email from caseworker had stated “once the respondent has filed the evidence in the correct format and it has been admitted into the proceedings the applicant will then be set a deadline to file a further reply should they wish to do so.”  In fact, this had been overtaken, since Mr Hannay had already filed evidence / submissions in reply to the Respondent’s evidence.  The Respondent’s evidence (which, as noted, Mr Nicolson had copied to Mr Hannay) was not open to addition or alteration – it simply required a statement of truth, which duly followed on 31 October 2023.  On 15 November 2023, parties were informed that the evidence rounds were concluded and that a decision may be made from the papers.  Mr Hannay replied to object that the Applicant had been denied its right of reply (as had been referenced in the caseworker’s email sent on the morning 17 October 2023).  I have addressed this point earlier in this paragraph, and I note anyway that Mr Hannay confirmed that the Applicant chose not to file further evidence, “Mr Nicolson not having advanced any point of worth”.  I will address the evidence in support of the Primary Respondent later in this decision where consider the defences claimed.

Decision

The Legislation

29. When the present proceedings were initiated, and when they were defended, the relevant section of the Act read as follows:

“69   (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.”

30. While the above represents the law as it stood throughout these proceedings, I note that changes to the Companies Act 2006 came into force on 4 March 2024. ^{[footnote 6]} Those changes included, inter alia, the omission of the defence under section 69(4)(b).  However, I nonetheless deal with the defence in this decision because it was one of the bases on which the parties have proceeded in their claims, evidence and submissions.  Moreover, notwithstanding the omission of section 69(4)(b) from the now operative legislation, evidence as to business activity by a respondent remains relevant in assessing motivation and may directly support a defence of good faith.

Goodwill and similarity of names

31. The Applicant claims goodwill associated with the names “Hebridean Spa” and “Hebridean Spa Limited”.  The Applicant claims that the name of the Primary Respondent is the same as those names or is sufficiently similar such that use of the name Hebridean Spa Holidays Limited would be likely to mislead members of the public by suggesting a connection between the Respondent company and the Applicant.

32. Before I deal with the evidence put forward by the Applicant to show its claimed associated goodwill, I should say that I do not accept that Hebridean Spa Limited is the same as Hebridean Spa Holidays Limited.  It differs by the inclusion of the word Holidays, and although that word is more or less descriptive in the context of Respondent’s claimed business, so too are the other elements of its name –“Hebridean”, “Spa” and “Limited”.  However, the direct overlap of the words Hebridean Spa Limited clearly gives rise to a similarity.  Once I have considered the Applicant’s evidence of goodwill, I shall return to whether the similarity between the names is such that it would mislead.

33. The evidence filed by the Applicant showed that its corporate name has been Hebridean Spa Limited since 25 November 2011 (as confirmed by exhibited extracts from the Companies House register).

34. Exhibit HEB03 is a printout copy of an online article dated 22 March 2017 from the website insider.co.uk.  No information is given about the reach or readership of that website or article.  The article highlights the expansion of the Applicant as shown (in full) below:

35. Although the signage at the production facility clearly includes the words “Hebridean Spa”, it is notable that the short article consistently refers only to “ishga”.  The article refers to its “work with luxury spas and hotels across Scotland” – as well as exporting to China and the Netherlands.

36. Mr Macrae’s first witness statement states at paragraph 4 that the Applicant is a trading company and has operated in business under the name Hebridean Spa throughout the UK and beyond for over a decade.  Mr Macrae then exhibits two invoices on which the Applicant’s company name appears.  Those exhibits are described as typical examples.  Exhibit HEB04 shows a customer invoice dated February 2014, from the Applicant addressed to a spa / hotel in Essex; the invoice (including VAT) is for a sum of £858 and is in respect of preparations such as face creams, cleansing lotion, toner, body oil, scrubs, body wraps and face masks.  The invoice shows the name of the Applicant in this way:

37. Mr MacRae refers to Exhibit HEB05 as “but an example of the trade undertaken between “Hebridean Spa Limited” and suppliers across the United Kingdom over the last decade”.  The invoice is dated October 2016 and is from a company in Hertfordshire.  It is an invoice for “1000 x Ishga cartons” (and a “cutter”) totalling nearly £2k.  It is addressed to the Applicant as follows:

38. Exhibit HEB07 shows an invoice dated 31 August 2022, which is after the relevant date, but which Mr Macrae states is included “for completeness, to illustrate the growth of trade on an invoice basis”.  It is an invoice from a company in London called Duchess & Alleycat, addressed to “Hebridean Spa Limited” in Stornoway, for around £13.5k.  The invoice shows that Duchess & Alleycat provided a “New Batch of boxes” to the Applicant as packaging for the Applicant’s products such as Men’s Beard Oil, Muscle Recovery Oil, Eye Balm, Exfoliating Face Mask, Creams, Toners, and Candles.

39. Mr Macrae states that the three invoices show that it is by the name “Hebridean Spa Limited” that the Applicant is known to customers and suppliers.  He states that “the Applicant’s customer base is at least across the UK and includes travel, accommodation and wellness sectors.”

40. Exhibit HEB06 is stated to show redacted profit and loss accounts filed for the Applicant for the years 2014 – 2020.  Turnover for 2020 is shown to exceed £700k, and the company had 16 employees.  These financial statements prepared by an accountancy firm in accordance with the Companies Act 2006 naturally identify the name of the Applicant company.  Mr Macrae states that turnover for 2021 approached £1.3 million.  The exhibit does not show what goods were sold, how they were branded or where they were marketed.

41. He states that the Applicant offers various branded products to both the professional and retail markets including around 80 different spa and skin care products with its leading brand being “ishga”.  He states that it is a legal requirement that the Applicant’s goods carry its corporate name, so for over a decade the products and packaging “have contained public facing references to “Hebridean Spa Ltd”.  Exhibits HEB08 - HEB10 show examples of skincare packaging from 2017 and 2018, where Hebridean Spa Ltd is named in the small print on the back of packaging as being the vendor of the ishga branded goods.  The following images of the packaging of the Applicant’s goods are illustrative (my highlighting):

42. It is clear that the branding of these goods is ishga.  ishga.com is also identified as the vendor website name.  ishga appears to serve as the Applicant’s trade mark and may fairly be considered as the sign that “brings in custom” in the classical phrasing under the law of passing off.  However, the definition of goodwill under section 69 appears to be broader than at common law.  For instance, goodwill for the purposes of passing off and trade mark law generally requires customers in the relevant territory and a reputation, without sales, is generally insufficient to establish goodwill in that context.  Contrastingly, section 69(7) of the Act, expressly provides that in the present context, ““goodwill” includes reputation of any description.”  That consequence of the Act’s wider definition of goodwill is not especially helpful to the Applicant; a lack of evidence of sales is not a particular issue in the present case, since the Applicant’s evidence indicates that there have been sales of skincare goods in the UK.  The issue is more whether the goodwill or reputation is based on the name Hebridean Spa, bearing in mind the defence position of the Respondent that acknowledges that the Applicant has a reputation in the manufacture and wholesale of skincare and cosmetic products, but claims that such reputation is only in respect of the name ishga.

43. Mr Macrae states that “beyond the Applicant’s customers, suppliers and trade partners, the Applicant sought and secured external funding in the form of equity and debt finance investment over the years in order for it to become the award-winning Scottish company trading globally that it is.”  Mr Macrae states that “such investment was in “Hebridean Spa Ltd”, hence the Applicant’s name is therefore known to a wide number of stakeholders.”  No further information is given on the Applicant’s funding, but I am anyway not satisfied that a company securing funding (from a bank or an investor) to develop and promote a product branded ishga, is enough, of itself, to generate goodwill or reputation in the company name.

44. Mr Macrae states that he has calculated that from the start of 2013 until 12 August 2021, the Applicant spent £951,256 on advertising, marketing and PR.  The evidence provides little further information about where or how this money was spent, nor how the name of the Applicant – as opposed, for instance, to “ishga” - might have featured in any advertising.  He states at paragraph 6 of his first witness statement that Exhibit HEB-11 is a copy of a marketing brochure from 17 May 2017.  No information is given about how widely that brochure was distributed.  Some extracts from the brochure are shown below:

Extract 1:

45. Though the print is faint, the above extract (Extract 1) confirms that “ishga provides a full range of professional products and treatments for use within Spas.” (my underlining)

Extract 2:

Extract 3:

Extract 4:

Extract 5:

46. The name of the Applicant company and its address are shown in Extract 5 from the back of the brochure.  The website, email enquiries suffix, facebook and twitter handles all refer to ishga (not to Hebridean Spa).

47. Mr Macrae refers to Exhibit HEB-12 as a copy of an “email footer displaying some of the recent industry awards that the Applicant has won”.  The witness statement lists 13 awards for various products between 2018 – 2022.  The awards listed include winning Marie Claire UK, Skin Awards 2021 for best hand sanitiser and best natural formula Anti-Oxidant Marine Cream.  Ishga’s Marine Cream also won an award at Top Santé UK Skincare Awards 2020 and ishga’s body oil won at the same awards in 2021.  The exhibit itself shows only these five awards:

48. None of these awards mentions the corporate name of the Applicant.  The awards are only shown in respect of “ishga”.  I of course recognise that the Applicant is called Hebridean Spa Ltd and that it owns the range of skincare and beauty products branded ishga, but the majority of the references in the evidence are to ishga as the source of the goods – for instance the article at Exhibit HEB03 states that “ishga harvests Hebridean seaweed” and identifies Malcolm Macrae as “director at ishga”.  This gives the impression to anyone reading that article that there is an entity - such as a registered company - named ishga, at which Mr Macrae is a director, and which is responsible for the range of organic skincare products branded ishga.

49. The final exhibit put forward in the Applicant’s evidence-in-chief on 26 October 2022 relates to the business operation of the Respondent based on the Respondent’s website, Facebook and Instagram pages, extracts from which are shown at Exhibit HEB-13.  Mr Macrae states that the Respondent “dropped the word “Holidays” from its marketing and trade use … after being refused supply of the Applicant’s products”.  Mr Macrae gives his opinion that “there appears to be a clear attempt to link the First Respondent to the Applicant, which is harmful.”  Extracts from HEB-13 are shown below:

Respondent’s website

Respondent’s Facebook pages

Goodwill in the claimed names

50. I have previously found that the parties’ respective names are not the same as one another – so cannot engage section 69(1)(a) of the Act.  I have acknowledged the undeniable similarity between the names Hebridean Spa Limited and Hebridean Spa Holidays Ltd; that similarity is a step toward founding a claim based on section 69(1)(b) of the Act.  The registered company name of the Applicant is Hebridean Spa Limited – it is self-evidently a name associated with the Applicant.  However, section 69(1)(b) also requires the Applicant to establish two further elements: (i) it must show that it has goodwill associated with the name Hebridean Spa Limited or Hebridean Spa, ^{[footnote 7]} and (ii) it must show that the similarity between the respective names is such that use of the name Hebridean Spa Holidays Ltd would be likely to mislead by suggesting a connection between the Applicant and the Primary Respondent. In my view, two difficulties arise for the Applicant in establishing those points (i) and (ii).

51. The first difficulty is that I find that the evidence showing use of the Applicant’s company name is not strong.  A lack of use of the Hebridean Spa name inevitably limits the build-up of goodwill based on that name.  Inclusion of the name Hebridean Spa Limited on its annual accounts does not generate goodwill (or reputation).  The name is shown on an invoice to a customer in 2014 (said to be a typical example), but only beneath the more prominent ishga; ^{[footnote 8]} the name appears as the addressee of two invoices from companies providing packaging, though the packaging in question is ishga-branded. ^{[footnote 9]} The Applicant is stated to have secured funding, helping it become “an award-winning Scottish company, trading globally”.  I am doubtful that merely borrowing money (for instance from the Bank of Scotland, as indicated in the photo at HEB-03) in the name of the Applicant is evidence of generated goodwill or reputation, and the evidence does not show a clear connection, from the perspective of the public, between the awards – identified as awards for ishga products – and the name Hebridean Spa Limited.

52. On the other hand, the evidence is that, whatever the public perception may be, the Applicant is in fact connected to or responsible for the ishga-branded goods.  The name and address of the Applicant appears in the brochure at Exhibit HEB-11 (Extract 5), but only once, whereas the signals to ishga are legion, as the brand name and in the social media and website references.  Nor is there any account of the distribution of that brochure anyway.  However, Mr Macrae gives evidence that the ishga-branded skincare products have featured the name of the Applicant company (albeit not prominently) for over a decade, and this is corroborated by the blueprints for the packaging at Exhibits HEB08 - HEB10.

53. In respect of goodwill, this tribunal routinely looks for guidance to case law developed in trade mark proceedings.  In such proceedings, it is well established that goodwill of more than a trivial nature, even if it is small, is capable of protection. ^{[footnote 10]} The concept of goodwill was explained in the House of Lords judgment in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217 at 223 as follows:

What is goodwill? It is a thing very easy to describe, very difficult to define.  It is the benefit and advantage of the good name, reputation and connection of a business.  It is the attractive force which brings in custom.  It is the one thing which distinguishes an old-established business from a new business at its first start.

54. However, section 69(7) of the Act expressly broadens the notion of goodwill in the context of company name objections to mean “reputation of any description.”  The evidence of use the name of the Applicant company would, in my view, be insufficient to establish genuine use for trade mark purposes; it may even be insufficient as a basis on which to found goodwill for the purpose of a passing off claim.  However, given the presence of the company name on ishga’s award-winning goods for over a decade, I am content to find that the Applicant does have the benefit of goodwill/reputation in respect of its claimed name “Hebridean Spa Limited” for the purpose of section 69 of the Act, although the strength of that goodwill or reputation is not shown to be high.

55. The second difficulty for the Applicant is the descriptive, or at least highly allusive nature of respective names; this low degree of distinctiveness in my view tends to reduce the likelihood that use of the name Hebridean Spa Holidays Ltd would be likely to mislead by suggesting a connection between the Applicant and the Primary Respondent.  The evidence shows that ishga products feature Hebridean seaweed and Hebridean natural spring water, ^{[footnote 11]} and that the Applicant is located on the Hebridean Isle of Lewis.  The evidence also shows that its ishga skincare products are for use by spas (as well as elsewhere for sale to the general public). The evidence likewise shows that the Primary Respondent operates a spa facility on the Hebridean Isle of Lewis. I have no evidence that it is common practice for a business that produces skincare products to also operate spa facilities.  In the present case, not only does the Applicant’s name have descriptive character, but use of the Applicant’s name has been far from prominent.  Its use has been greatly subordinate to the ishga branding and the evidence does not establish that the Applicant’s name has gained much in the way of distinctiveness through use.  These factors mitigate against the similarity being such as to mislead by suggesting a connection between the parties.  The similarity may more likely be seen simply as coincidence.

56. I acknowledge that there is some proximity in the parties’ fields of interest – as reflected in their shared word “Spa”.  I also acknowledge that a company may change its nature of business (as shown in its SIC code in the Companies House register).  Thus, the Applicant could change from its currently stated “SIC 82990 - Other business support service activities not elsewhere classified” to “SIC 55209 - Other holiday and other collective accommodation”, which is the nature of business for which the Primary Respondent is registered. (I note, however, the evidence of Mr Macrae’s email to Mrs Maclennan suggesting any plans Mr Macrae may have for a spa of its own “sometime in the future” were stated to be for an “ishga spa”.)

57. As things stand, there are relevant differences in the customer bases of the parties.  The customer base for Primary Respondent comprises the general public seeking a short indulgent break being pampered in a spa facility.  The customer base for the Applicant’s claimed business support service activities appears to comprise businesses that are spas / hotels / wellness centres to whom the Applicant markets the goods and services of ishga. ^{[footnote 12]}

58. Mr Macrae states at paragraph 5 of his first witness statement that the Applicant offers various branded goods not only to the professional market, but also to the retail market, though there is little or no corroborative evidence showing the Applicant’s retail to the general public.  Whereas the Applicant’s professional customer base may be more likely to directly encounter the Applicant’s corporate name – either as part of an invoice or within a marketing brochure – it seems to me much less likely that the general public will notice the corporate name of the Applicant discreetly included on the packaging of its ishga skincare goods.  Since the general public, rather than businesses, are the typical customer of the Primary Respondent (Hebridean Spa Holidays Ltd), and since the general public are unlikely readily to associate the ishga-branded goods with Hebridean Spa Ltd, there seems little risk of a misleading connection being made between the companies.

59. That being so, the Applicant has not discharged the evidential burden on it under section 69(1) to show goodwill in a name associated with the Applicant such that use of name of the Primary Respondent (though similar to the name of the Applicant) would be likely to mislead by suggesting a connection between the parties.  If I am correct in my analysis of the situation, then the objection under section 69 must fail at that hurdle.  However, in case I am wrong in my analysis, I shall proceed to consider whether the Respondent would anyway be able to rely on any of its three claimed statutory defences.

Respondent defences

The section 69(4)(b) defence

60. The Respondent invoked the defence provided under section 69(4)(b) of the Act that it is operating a business as Hebridean Spa Holidays Ltd and has incurred substantial start-up cost in preparation to do so. I note that earlier this month, on 4 March 2024, amendments to the Companies Act 2006 came into force, one of which was to omit section 69(4)(b).  That change was introduced by the Economic Crime and Corporate Transparency Act 2023, which does not include any related transitional provisions, so makes no provision for the repealed law to continue to apply in certain cases.  Stakeholders have been informed (by a general notice on the GOV.UK website) that it is the Tribunal’s view that for all active proceedings which continue beyond the date on which section 69(4)(b) is repealed, that particular provision will no longer be available or enforceable as a defence.  However, it is my view that it would be contrary to natural justice to deny the Primary Respondent the right to rely on that defence in circumstances where the proceedings have not only been initiated and defended, but completed the evidence rounds and have been ready for decision for some time.

61. I am satisfied that the Primary Respondent is operating a business under the name Hebridean Spa Holidays Ltd and that it incurred substantial start-up costs in preparation to do so.  The evidence in support of this includes:

(i) the fact of the email from Mrs Kristine Maclennan on 24 March 2022 reporting that her “husband Finlay has been working on developing a health and wellbeing spa last while in Tong” anticipated to open in June 2022 under name of the Primary Respondent, the plans for which Mr Maclennan offered to share with Mr Macrae at the time.

(ii) Mr Maclennan’s defence statement under a declaration of truth that he had incurred preparatory costs of over £100,000 for the spa to operate.

(iii) Exhibit HEB-13 under Mr Macrae’s First Witness Statement of 26 October 2022, showing the website and Facebook pages of the Primary Respondent, which tends to indicate the operation of a spa facility on Stornoway, referencing pampering and relaxation time including sauna and massage treatments.  I did not see any dates on the content of Exhibit HEB-13, but by October 2022 the website pages are shown to invite customers to “Book Now” or to buy “Gift Cards” and the Facebook pages shows 5 reviews and 1.2k likes.

62. Most significantly, I noted the later filed evidence of Mr Nicolson.  In account of his evidence being late, Mr Nicolson explains that after a period of persistent serious ill-health, he left the accountancy firm he worked for in March 2023.  He required time to recover before being able to undertake any work.  His evidence then addresses various issues, including the claimed investment expenditure and Mr Macrae’s asserted conclusion that the Primary Respondent has never traded.

(i). Mr Nicolson identifies the original planning permission for the building granted on 4 May 2018, but explains that it took some time for the final structure to be agreed and for the project to be completed, a Completion Certificate only being issued in 2022.

(ii). I have noted that the Applicant’s letter before action was dated 14 July 2022 and its CNA1 was filed on 23 August 2022, and that the Respondents filed dormant accounts for the period to 31 August 2022.  I have also noted Mr Hannay’s contention that any activity (which is denied) from 1 September 2022 to 21 August 2023 is entirely irrelevant.  However, I do not accept Mr Hannay’s contention that any such activity would be irrelevant, as it is natural (and relevant) that there may be preparations in the run up to starting to operate a spa facility and the nature and cost of those preparations are material considerations.  But Mr Nicolson’s evidence anyway addresses the dormant accounts.

(iii). Mr Nicolson states that the accounts of the Primary Respondent were filed at Companies House on 19 September 2023 and show capital expenditure (for fixed assets) as £245,000.  Matters had not been dealt with during his period of ill health and the overdue accounts for 2022 were filed at very short notice and primarily to stop striking-off.  The accounts to 31 August 2022 were filed as dormant, but trading actually started in early July 2022, after the facility was commissioned and once the building work had reached such a position that it was possible to entertain guests.  Mr Nicolson shows a copy of what is said to be the Primary Respondent’s bank account statement, which indicates (very limited) activity as early as 9 July 2022, just predating even the Applicant’s letter before action (15 July 2022).

(iv). Mr Nicolson states that the transactions in July 2022 should have been included in the 2022 accounts, but as there was a miscommunication about the exact dates and because the accounts needed to be filed urgently, the July 2022 income was overlooked.  He states that “after review, it is not proposed to amend the 2022 accounts as any change would not be material and there was no tax loss as a consequence of this omission.”  An extract from the full accounts shows the Primary Respondent to have achieved turnover of over £64,000 for the period of 11 months 1 September 2022 to 31 July 2023.

(v). Mr Nicolson also states that in September 2022 the Primary Respondent was approved for and subsequently issued an Occasional Licence by the local council as Licencing Authority, it having taken some time to meet the requirements to apply for this licence and to demonstrate that the premises were operational and were operating inside the relevant regulatory framework.  Mr Nicolson is conversant with the process having been a former member of the Outer Hebrides Licencing Board and his evidence includes a copy of the relevant licence.

(vi). Mr Nicolson verifies that the location of the business of Hebridean Spa Holidays Ltd is at the Primary Respondent’s (now) Registered Office at Tong Road, Isle of Lewis.  He has visited the location and been given a tour of the facilities and there is “an advertising and sign board on the main road directing traffic to the premises, which are just over 2 miles outside the town of Stornoway, Isle of Lewis.”

The section 69(4)(d) defence

63. The Respondent also relies on the defence under section 69(4)(d) of the Act that the name was adopted in good faith.  Even if the lack of transitional provisions meant that the Respondent were no longer able to rely on its section 69(4)(b) defence, despite the case having been ready for decision for some months, it is my view, for the reasons I give below, that the Respondent would nonetheless have a sound defence based on good faith.

64. The relevant date for this defence is the date on which the company name was adopted i.e. 12 August 2021.  Good faith is a broad concept which includes a failure to act in a commercially acceptable way; it includes, for instance. sharp practice which falls short of outright dishonesty. ^{[footnote 13]} A combined subjective/objective approach is to be taken in assessing the honesty of a party’s behaviour.  This involves (i) a consideration of what the party knew at the time of adopting the contested name and (ii) whether the adoption of the name would be viewed as commercially acceptable behaviour when judged objectively - this means how reasonable people in the field would view the Respondents’ behaviour.

65. It is important to bear in mind the purpose behind the provisions introduced by section 69 of the Companies Act 2006.  It is the role of Company Names Adjudicators to deal with applications (complaints) concerned with opportunistic company name registrations.  The company names tribunal section of the GOV.UK website explains as follows:

This provision of the Act provides a remedy for parties who are aggrieved by the registration of a company name in which they have a goodwill/reputation; specifically, that they suspect the name has been registered in order to extract money or to prevent the aggrieved party from registering the name. An example might be when someone registers one or more variations of the name of a well-known company in order to get the latter company to buy the registration(s). Another example might be where someone knows that a merger is about to take place between two companies and so registers one or more variations of the name that the newly formed commercial entity is likely to require.

66. It is not the role of Company Names Tribunal to deal with cases where someone considers another company name registration is too similar to, or ‘too like’, their own company name but where there is no opportunism behind the registration.  Disputes or complaints of that sort may be dealt with by Companies House. ^{[footnote 14]}

67. I am unconvinced that there is anything opportunistic about the registration of the Primary Respondent under the name Hebridean Spa Holidays Ltd.

(i). There has been no attempt to squat on the challenged name.  The name has been used to operate the spa business and there has been no attempt to extract money or to prevent the Applicant from registering or using its own company name.

(ii). There has been minimal public-facing use of the Applicant’s company name.  The evidence shows that the Applicant is a manufacturer of skincare products and that those products are branded ishga; ishga is also used to identify the supplier – as in the formulation of the ishga web domain.  Despite the corporate name featuring on the reverse of the ishga goods, the impact of that reference may be limited.

(iii). The Respondent’s CNA 2 defence included some detailed submissions under the headings “Failure to market the company name” and “Ownership of the brand”.  The Applicant did not contradict or address those points, which were as follows:

“Failure to market the company name

A director of the applicant has recorded his directorship of Hebridean Spa Ltd on LinkedIn, the networking site.  It appears that no page has ever been created for Hebridean Spa Ltd on LinkedIn and that no posts have ever been made about Hebridean Spa Ltd as shown on the attached.  The LinkedIn page for ishga Skincare has numerous posts and describes the business as “Personal Care Product Manufacturing”.

Ownership of the brand

Prior to formation of Hebridean Spa Holidays Ltd, it was established that the websites hebrideanspa.com and hebrideanspa.co.uk were ‘parked’ at 123-reg.co.uk and appear never to have been active.

The attached documents indicate that both hebrideanspa.com and hebrideanspa.co.uk were first registered on 10 May 2013 and have never been activated or redirected to point to any active website.  If these names were important to the applicant, they would either have acquired them or - if they owned them - pointed them to their trading website at uk.ishga.com

Although much of the documentation is redacted, it has been possible to ascertain that hebrideanspa.com is owned by Hebridean Seaweed Ltd.

Hebridean Seaweed Limited was formed by Malcolm Macrae and Martin MacLeod in 2005 and is now owned by Marigot Ltd, and Irish company.  The PSC list is attached.

Hebridean Spa Ltd is 20% controlled by Malcolm MacRae and 20% by Martin MacLeod, as shown on the attached Confirmation Statement.  The record at Companies House clearly demonstrates that there was a prolonged period when the directors of Hebridean Spa Ltd were also directors and the controlling party of Hebridean Seaweed Ltd, yet they did not transfer the domain names nor utilise them in any way.

The applicant does not control the domain name and has not demonstrated that it has made any attempt to obtain control over the domain names.

The domain names are controlled by another company with no relation to the applicant and despite assertions that the trading name is important, there appears to have been no attempt by a 20% shareholder in the company to transfer control of the domain names to the applicant from a company he formerly controlled.

It is asserted that, any right to the trading name has been lost by the failure of a director in the applicant to ensure that the domain names came into the possession of the applicant.

It is asserted that, the applicant has permitted the possibility of confusion by allowing the domain names to remain with Hebridean Seaweed Ltd and that the failure to obtain the domain names indicates the lack of value placed on the trading name by the applicant.”

(iv). Given the low-profile use of the Applicant’s company name, for Personal Care Product Manufacturing, there seems to me no compelling reason why a spa business, based on a Hebridean island should not be considered to be acting in good faith in calling its business Hebridean Spa Holidays Ltd.  As stated in the CNA 2, “the respondent’s company name accurately describes the business, giving an accurate geographic indicator followed by an accurate descriptor of the activities.”

(v). I see no reason to accept the submission in the second witness statement of Malcolm Macrae that the Respondents have made up “a ‘geographic identifier’ cover story”.  I also reject the Applicant’s contention that because the Primary Respondent, until 31 July 2023, had been registered at an address in Glasgow, which is 200 miles away from the Hebrides, that use of “Hebridean” was therefore “entirely misleading.”  As Mr Nicolson submitted, the key determinant about the relevance of a geographic business name is not the location of the Registered Office but the location where the business takes place.  The spa business operates on the Isle of Lewis.

(vi). Moreover, the evidence filed by Mr Nicolson explains that his accountancy practice had offices in Glasgow, Stornoway and Kilmarnock, but that he was primarily based in the Glasgow office.  He states that he incorporated the company on 12 August 2021 as “Hebridean Spa Holidays Ltd” directly with Companies House using his firm’s specialist company formation software.  Mr Nicolson appointed himself as shareholder and director and states that he commonly registered ‘shelf companies’ to give clients the ability to develop their plans ahead of full operation.  He explains that the reason for registering Hebridean Spa Holidays Ltd company under his name was simply to manage the administration of the company, as the operating address (at Tong Road, Isle of Lewis) was neither ready nor occupied at the time of incorporation.  He states that whilst other ‘shelf companies’ deliberately obscured their names so as to avoid alerting third parties as to the events taking place, Hebridean Spa Holidays Ltd was deliberately registered in its own name as there was no intention or desire to obscure their activities.  The name was therefore in the public domain from the date of incorporation.  On 31 May 2022 Mr Nicolson resigned as a director and transferred the shares, so that Finlay Maclennan became the sole director and shareholder.  He explains that the transfer occurred on this date as the completion of the building work was imminent and the company was seeking banking and credit card facilities, and a liquor licence, and that these were far more easily obtained if tied to the director and shareholder at the operating address.

(vii). Mr Macrae states that “even if the ‘geographic identifier’ is in point, the Respondents fail to comment on how that relates to the goodwill and/or reputation they admit is attached to the HEBRIDEAN SPA mark, and fail to address the distinctive character acquired by the Applicant through use.”  This is a mischaracterisation of the Respondent’s position.  They admit goodwill/reputation associated with the name ishga, which is owned by the Applicant.  The Respondent makes no admission in respect of goodwill or reputation based on the name of the Applicant.

(viii). Mr Hannay submits that the Respondent has failed to set out its thought process in selecting the contested name of its company.  It seems to me an entirely understandable choice of name for a business proposing to operate a spa facility on a Hebridean island, such that the thought process may be considered self-evident.

(ix). Moreover, the content of the email exchange (though after the relevant date) between Mrs Maclennan and Mr Macrae – set out at paragraphs 9 and 10 of this decision - tends to support the good faith conduct of Respondent.  Mrs Maclennan is entirely open about the Respondent’s planned spa and its (already registered) name.  Mr Macrae in reply refers to his own inchoate plans for an “ishga spa” and wishes Mrs Maclennan well with her own spa.  The evidence does not show, as Mr Macrae claims, that the Respondent “dropped the word “Holidays” from its marketing and trade use … after being refused supply of the Applicant’s products”.  The spa may be identified as Hebridean Spa, but the underlying name of the company that operates it remains Hebridean Spa Holidays Ltd.  Mr Macrae’s Exhibit HEB-13 shows the Respondent’s Facebook page as stating, under the “About Hebridean Spa” heading, “part of Hebridean Spa Holidays Ltd” (as I have circled in the image at page 27 of this decision).  Nor is there evidence that the marketing changed to omit the word “holidays” following Mr Macrae’s decision not to provide ishga goods to Mrs Maclennan.  For the reasons I have given earlier around the low public profile of the Applicant’s company name, I disagree with Mr Macrae’s contention that “there appears to be a clear attempt to link the Primary Respondent to the Applicant”.

The section 69(4)(e) defence

68. The Respondent also relies on the defence under section 69(4)(e) of the Act that the interests of the Applicant are not adversely affected to any significant extent.  The onus of proof is on the Respondents to show that it is more probable than not that the interests of the Applicant are not adversely affected to any significant extent.  The terms of the defence are written in the present tense and the matter is to be judged at the date of the filing of the application to the Tribunal for a change of name. ^{[footnote 15]} Various factors play into the consideration of this claimed defence, including the distinctiveness of the name relied on, the extent of the reputation and goodwill and the potential overlap of interests between the businesses of the parties

69. The provisions of sections 69(4)(b) and (d) that I have dealt with above offer the Respondent its clearest defences.  However, it also seems to me that the Respondent’s may also be able to rely on a defence under section 69(4)(e) as it is not clear how the interests of the Applicant would naturally be adversely affected to any significant extent in view of factors that I have addressed previously, such as the Applicant’s apparent focus on its ishga brand, which is distinctive and entirely dissimilar to the name of the Primary Respondent.  The Applicant’s ishga goods are marketed to spas/hotels whereas the spa services of the Primary Respondent are directed to the general public living on or visiting the Isle of Lewis.  (To the extent that the general public may encounter the Applicant’s goods, they would consider them ishga goods, and if they were to notice the name of the Applicant on the back of the skincare goods, I doubt that it would adversely affect the interests of the Applicant for there to be a company on the Isle of Lewis offering spa breaks under the corporate name Hebridean Spa Holidays Ltd.  Even if the Applicant were to open its own spa, the evidence suggests that it would be by reference to the name ishga.

Outcome

70. The application to change the contested Company Name is successful, because even if (contrary to my primary conclusion) the Applicant has relevant goodwill / reputation, I have upheld each of the three claimed defences.

Costs

71. The Tribunal awards costs from the published scale at paragraph 10 of the Company Names Tribunal’s Practice Direction.  This is intended to provide a contribution to, but not recompense, the successful party.  It is the Respondent who has been successful in defending these proceedings and who is entitled to a contribution towards its costs.

72. The Respondents have incurred the following official fees:

• Notice of defence (Form CNA 2):   £150
• Fee for filing evidence (Form CNA 3):  £150

Despite the additional time given by the Tribunal, the Respondents incurred no fee for an extension of time, which would ordinarily be £100 (for Form CNA 5).

Other awards indicated in the Practice Direction are:

• £300 to £500 for preparing a statement and considering the other side’s statement;
• From £500, if the evidence is light, to £2,500 if the evidence is substantial;
• From £100 to £500 for preparation of submissions, depending on their substance, if there is no hearing.

73. Mr Hannay submitted that “throughout the proceedings, and despite good reasons submitted to the Tribunal urging the contrary, the Tribunal has bestowed unmerited grace on the Respondent.”  I do not accept that that is so.  This decision has set out in some detail various relevant exchanges between the Tribunal and the parties.  The basis on which the Respondent has succeeded in defending the application for a change to its company name was essentially captured in its Form CNA 2 and its supporting information.  Its position has only been strengthened and borne out by the additional time afforded to it by the Tribunal.

74. Nonetheless, it is regrettable that it proved necessary to re-open the evidence rounds and I accept that the Applicant has been put to greater expense as a consequence.  While I accept that Mr Nicolson was unwell and absent from work at relevant points, there is a degree to which the Respondents bear responsibility for the unusually protracted course of these proceedings.  In the circumstances, I consider that a fair award to the Respondent may be limited to £500.

75. Hebridean Spa Ltd is ordered to pay Hebridean Spa Holidays Ltd the sum of £500 within twenty-one days of the expiry of the appeal period, or within twenty-one days of the final determination of this case if any appeal against this decision is unsuccessful.  Under section 74(1) of the Act, an appeal can only be made in relation to the decision to refuse the application; there is no right of appeal in relation to costs.

76. Any notice of appeal must be given within one month of the date of this decision. Appeal is to the High Court in England and Wales and Northern Ireland and to the Court of Session in Scotland.  The Tribunal must be advised if an appeal is lodged.

Dated: 26 March 2024

Matthew Williams
Company Names Adjudicator

1. This was confirmed by the tribunal letter of 31 October 2022.  (Mr Maclennan had been given an opportunity to comment on the request, but did not do so.)  The letter also noted that no request had been made to join Angus Nicolson to the proceedings because he had resigned as Director from the company on 31 May 2022. ↩

2. It is noted that the Act has been amended as of 4 March 2024 to omit section 69(4)(b).  I return to this point later in this decision. ↩

3. This is not in fact accurate; it was the gift box business that Ms Maclennan said was about a year old at the time of her email. ↩

4. Paragraph 8 of the First Witness Statement of Malcolm Macrae refers to the Primary Respondent’s website, social media and marketing and trade use and supported by Exhibit HEB13 ↩

5. I take this to be a typographical error and that the date intended was 1 September 2022. ↩

6. Economic Crime and Corporate Transparency Act 2023. ↩

7. The only evidence that the Applicant has ever deployed the name “Hebridean Spa”, on its own, is the signage shown in the March 2017 photo of its production facility at HEB03. ↩

8. Exhibit HEB04 ↩

9. Exhibit HEB05 and HEB07 ↩

10. Stacey v 2020 Communications [1991] FSR 49 refers. ↩

11. For instance, Exhibit HEB-11, Extract 2 ↩

12. Exhibit HEB11 Extract 1 ↩

13. See paragraph 164 of the judgment of the Court of Appeal in Niru Battery Manufacturing v Milestone Trading Ltd [2003] EWCA Civ 1446 ↩

14. Section 67 of the Act. ↩

15. As noted at H19 of the decision in MB Inspection Ltd v Hi-Rope Ltd BL O-106-10, [2010] R.P.C. 18, cited in the submissions of the Applicant in the present case. ↩