Decision

Decision on Boston & Alexander Resources Limited

Updated 4 April 2022

Order under the Companies Act 2006

In the matter of application No. 3216

For a change of company name of registration No. 12303312

Introduction

1. The company name Boston & Alexander Resources Limited (“the primary respondent”) has been registered since 7th November 2019 under number 12303312. On 19th June 2020, Boston and Alexander LLP (“the applicant”) filed an application under section 69(1) of the Companies Act 2006 (“the Act”) for an order changing the name of the company.

Co-respondent

2. Mr Bulent Osman is the sole director and shareholder of the primary respondent. Following an application by the applicant, he has been joined to the proceedings as a co-respondent in accordance with s.69(3) of the Act.

Claims

3. The applicant claims that:

(1) The applicant was incorporated under its current name in 2010 and has traded since then in the field of investment management;

(2) As a result of such activities, the applicant has acquired goodwill under Boston and Alexander;

(3) The name Boston & Alexander Resources Limited is sufficiently similar to Boston and Alexander to mislead by suggesting a connection between the primary respondent and the applicant;

(4) The co-respondent was aware of the applicant when the primary respondent was incorporated;

(5) The primary respondent is not trading and was incorporated in order to obtain money from the applicant;

(6) The co-respondent replied to the applicant’s pre-action warning letter denying the names were similar and offering to sell the primary respondent (or dissolve it) on payment of £10k.

4. The respondents filed a Notice of Defence. The main points taken are that:

(1) It is denied that the names at issue are similar enough to cause deception;

(2) In this connection, the respondents point out that the register of companies shows that the applicant and the primary respondent have different principal activities;

(3) Although it is accepted that the applicant is trading, it is denied that it is a substantial business;

(4) In 2020, ownership of the applicant was acquired by companies now called Boston and Alexander Holdings Limited and Boston and Alexander Management Limited;

(5) If these companies has conducted due diligence searches when purchasing the applicant they would have found out that the primary respondent had been incorporated in 2019;

(6) It is denied that the respondents have sought money from the applicant;

(7) It was legitimate to offer to sell the primary respondent to the applicant because companies, like domain names, can be bought and sold;

(8) 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;

(9) The name of the primary respondent was adopted in good faith;

(10) Registration of the primary respondent has not adversely affected the interests of the applicant to any significant extent.

5. Both sides seek an award of costs.

Representation

6. The applicant is represented by DWF Law LLP. The respondents are not legally represented.

The evidence

7. The applicant’s evidence consists of a witness statement (with exhibit AVH1 consisting of 242 pages of documentary evidence) by Mr Antony Victor Hawker, who is a Director of Boston and Alexander Holdings Limited and Boston and Alexander Management Limited, i.e. the corporate members of Boston and Alexander LLP. Mr Hawker says he is authorised to give evidence on behalf of the applicant. The application form CNA1 was also accompanied by four short exhibits. As the application form included a statement of truth, I will treat these exhibits as part of the applicant’s evidence.

8. The respondents filed no evidence.

The law

9. Section 69 of the Act states:

(1) A person (“the applicant”) may object to a company’s registered name on the ground—

(a) that it is the same as a name associated with the applicant in which he has goodwill, or

(b) that it is sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

(2) The objection must be made by application to a company names adjudicator (see section 70).

(3) The company concerned shall be the primary respondent to the application. Any of its members 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.”

Goodwill

10. Mr Hawker’s evidence is that:

(1) The applicant was incorporated in 2010;

(2) In 2011, the applicant was authorised by the Financial Conduct Authority to provide investment management services;

(3) From September 2011 to date the applicant has acted as investment fund manager for Boston & Alexander Fund SICAV-FIS and Boston & Alexander Number One Fund Limited;

(4) Since 2013, the applicant has also acted as the principal for a number of appointed representatives, or as an authorised representative, making it responsible for the regulated activities undertaken by those businesses in the UK;

(5) These businesses include Fairview Capital Group Ltd (from 23 Aug 2019), IDCM Limited (from 8 July 2014), Nimbus International Limited (from 7 Feb 2017), ARMS MFRM Ltd (from 1 Aug 2018 -31 Aug 2020), Augusta Ventures LLP (from 19 Aug 2013 - 29 Feb 2016), Grenville Fox Holdings Ltd (from 6 Apr 2018 - 26 Aug 2020), and Grey Garth Limited (from 13 Jun 2017 - 30 Mar 2018);

(6) The investment fund manager and principal services were provided under and by reference to the name BOSTON AND ALEXANDER;

(7) The applicant has operated an active website and promoted its services from the URL www.bostonandalexander.com since at least January 2011;

(8) Audited accounts filed at Companies House for the period 31 March 2011 to 31 March 2018 show a combined turnover from the provision of investment management services of just over £1.5m;

(9) David RR Passey, the sole member and owner of all rights, titles and interests in Boston and Alexander LLP at the time, sold the entirety of his rights, titles and interests to Bricktobuy Holding Limited and Bricktobuy Management Limited pursuant to a Sale and Purchase Agreement dated 1 November 2019;

(10) Bricktobuy Holdings Limited and Bricktobuy Management Limited subsequently changed their names to Boston and Alexander Holdings Limited and Boston and Alexander Management Limited, i.e. the applicant’s current corporate members.

11. I find the applicant’s evidence shows that, as at the date of the current application, it was a small business providing investment fund management services to a small number of clients. The business had been operating for 9 years at that point in time under the name Boston and Alexander. It would have acquired a small but more-than-trivial level of goodwill as a result of these trading activities. I therefore find that the applicant has showed that, by the date of the application, it had acquired goodwill under the name as required by section 69 of the Act.

Similarity of names

12. The test is whether the respondent’s name is:

…the same as a name associated with the applicant in which he has goodwill, or…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.

13. The respondents contend that the contested name is distinguishable from the applicant’s name because it has a ‘&’ sign instead of the word ‘AND’, and it includes the additional word ‘Resources’.

14. The applicant says that (a) BOSTON AND ALEXANDER is a distinctive combination, (b) the word ‘Resouces’ in the primary respondent’s name is, by contrast, non-distinctive (or, at least, less distinctive) because it simply describes the provision of ‘resources’ of one kind or another from BOSTON AND ALEXANDER, and (c) that the recorded principal activites of the companies will not prevent the name of the primary respondent from misleading by suggesting a connection with the applicant.

15. In support of point (a) above, the applicant points out that, apart from the parties to these proceedings, the Companies register shows only four other companies with names including “Boston and Alexander”. These are “Boston and Alexander Holdings Limited”, “Boston and Alexander Management Limited”, “Boston and Alexander Networks Limited” and “Boston and Alexander Property Limited”, all of which are part of the same group of companies as the applicant.

16. The respondents have not contested this evidence. In any event, the evidence does no more than confirm my initial impression that BOSTON & ALEXANDER does most of the work in identifying the company registered as Boston & Alexander Resources Limited. Self evidently, ‘Limited’ is simply a statement of corporate status used by nearly all limited liability companies. ‘Resources’ indicates that the company is engaged in the provision of ‘resources’ of some unspecified kind. It will therefore do very little to avoid the public being misled into believing that Boston & Alexander Resources Limited is connected with Boston and Alexander LLP. As for the substitution of the ampersand for the word ‘and’, I doubt whether most of the public would even notice this difference. After all they are both short joining signs and mean the same thing.

17. The use in section 69(1) of the Act of the words “a name associated with the applicant in which he has goodwill” (emphasis added) indicates that the applicant’s goodwill is to be considered in the assessment of whether use of the contested name is likely to mislead. By contrast, the nature of the primary respondent’s business is not usually an important factor in this assessment. This is because (a) although a company’s main business activities are recorded in the register of companies, this does not prevent companies from conducting other activities, and (b) the primary respondent’s principal business activities are recorded as being “[code] 8299 - Other business support service activities.” This is so vague as to be virtually meaningless. It is certainly not a sufficient basis to assume that the primary respondent’s name could not really be used in relation to investment management or similar services.

18. I find that the inclusion of the word ‘Resources’ in the contested name means that the contested name is the not the same as the name(s) in which the applicant has established goodwill. Consequently, s.69(1)(a) of the Act does not apply. However, I find that the names are sufficiently similar to mislead the public into believing that the primary respondent is connected with the applicant. Consequently, the requirements of section 69(1)(b) of the Act are met.

The defences

19. The Notice of Defence appears to identify three defences. Firstly, 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. Secondly, the contested name was adopted in good faith. Thirdly, that the interests of the applicant are not adversely affected to any significant extent.

20. The first defence pleaded is plainly inapplicable in this case. This is because the contested name was not registered in the ordinary course of a company formation business. A company formation business is a business that specialises in incorporating numerous companies and selling them ‘off the shelf’ to businesses who urgently need a corporate vehicle for their current or proposed trading activities. The contested name was not chosen by such a business. The primary respondent was incorporated by the co-respondent. Consequently, the defence set out in section 69(4)(c) of the Act cannot apply.

The good faith defence.

21. In Niru Battery, Moore-Bick J. said:

I do not think that it is desirable to attempt to define the limits of good faith; it is a broad concept, the definition of which, insofar as it is capable of definition at all, will have to be worked out through the cases. In my view it is capable of embracing a failure to act in a commercially acceptable way and sharp practice of a kind that falls short of outright dishonesty as well as dishonesty itself.

On appeal, the above statement was approved by the Court of Appeal in England and Wales.

22. The respondents say that the contested name was adopted in good faith. According to the respondents’ Notice of Defence:

It is offensive to suggest bad faith on our behalf especially since there are numerous newly incorporated Bostons. The lawyer in some way wishes to paint our good commercial fortune with their client’s bad commercial luck. Our Boston & Alexander Resources Limited is a dormant company and quite obviously a name which they sought to register along with the countless others, in their response the lawyer wishes to insinuate that we have no right in offering the company for sale, when in fact .com names are bought and sold at premiums.

23. The respondents further contend that:

We deny allegations of attempting to obtain money from the applicant and request proof that we contacted them with demands. We deny prior knowledge and request the applicant to show the contracts of purchase of the newly aquired Boston And Alexander LLP and the orgnagram [sic] of Boston companies and there [sic] ultimate beneficial owners (UBO).

24. The applicant’s case rests on the distinctiveness of the combination BOSTON and ALEXANDER. The existence of other companies using the word BOSTON (alone) is therefore irrelevant.

25. The respondents’ protestation that the applicant is a small company appears to be linked to its denial of “prior knowledge”, which I understand to mean knowing about the applicant’s business under the name ‘BOSTON and ALEXANDER’ when the contested company name was adopted. In his witness statement, Mr Hawker says that he has:

….seen a copy of an email dated 22 June 2020 from Mr David R R Passey, a member of Boston and Alexander LLP from its incorporation in February 2010 to June 2020 to Mr Adrian Kirby (the beneficial owner of Boston and Alexander Holdings Limited) and [the applicant’s lawyers] in which he confirmed that Mr Bulent Osman was known to him.

26. In that email, Mr Passey states that in August 2019 he entered into Heads of Terms and an exclusivity arrangement with Mr Osman over the purchase of Boston and Alexander LLP. Following the end of the 45 day exclusivity period, Mr Passey confirms that no Sale and Purchase Agreement had been signed and following a threat of commencement of legal proceedings against him, Mr Passey entered into a settlement with Mr Osman.

27. A copy of the settlement letter between Mr Passey, on behalf of Boston & Alexander LLP, and Mr Osman on behalf of BBP Bandenia pie, dated 28 October 2019, is in evidence. The letter refers to previous discussions and correspondence between them in relation to the proposed acquisition of Boston and Alexander LLP by BBP Bandenia pie. The letter terminated the proposed acquisition and confirmed that Mr Passey would return the exclusivity payment of £5,000 as well as paying an additional sum of £5,000. This released the parties from previous agreements and undertakings entered into. The letter was countersigned by Mr Osman on 28 October 2019.

28. Companies House records confirm that Mr Bulent Osman is the secretary of BBP Bandenia pie, appointed on 15 June 2017. Mr Hawker points out that 10 days after signing the letter, Mr Osman incorporated Boston & Alexander Resources Limited.

29. As I noted earlier, the respondents filed no evidence. Consequently, Mr Hawker’s account of a prior relationship between Mr Osman (as secretary of BBP Bandenia pie) and the then owner of the applicant is not challenged. Given that Mr Osman is also the sole director and shareholder of the primary respondent, it is plainly untenable for the respondents to deny having prior knowledge of the applicant and its business.

30. The respondents say in the Notice of Defence that if the new owners of the applicant had conducted due diligence searches before acquiring the applicant they would have found the contested company name. This suggests that the respondents expected this to happen, and for the existence of the primary respondent to be a problem for any alternative buyer of the applicant. It therefore seems likely that the company name was adopted in order to obtain money or other consideration from the applicant or, alternatively, to stick a spoke in the wheel of the process of selling the applicant to anyone else.

31. Once it is established that the co-respondent had a connection with the applicant it is for the respondents to provide a positive case explaining how the contested company name was nevertheless adopted in good faith. The only possible explanation offered is that it was thought that the names were sufficiently different. And that explanation was only tendered indirectly by way of a denial of similarity between the names in the Notice of Defence (as opposed to in a witness statement from Mr Osman). In any event, I reject that explanation. In my view, the evidence points to the contested company name having been chosen precisely because it was likely to be similar enough to be problematic to the applicant.

32. I conclude that the respondents have not discharged the onus on them to show that the contested name was adopted honestly, or that its adoption would be viewed as commercially acceptable behaviour when judged objectively. This means how reasonable men and women in the field would view the respondents’ behaviour (i.e. not simply how the respondents viewed their own actions). The good faith defence therefore fails. The interests of the applicant are not adversely affected to any significant extent.

33. The applicant points out that as a regulated provider of financial services its reputation could be damaged if the contested company name were to be used in relation to investment or similar services of a lower quality than those provided by the applicant. There is obvious force in that submission and I accept it. This defence fails.

Outcome

34. The respondents cannot rely upon any of the defences. Therefore, the application is successful. In accordance with section 73(1) of the Act, the following order is made:

(a) Boston & Alexander Resources Limited Limited shall change its name within one month of the date of this order to one that is not an offending name;^{[footnote 1]}

(b) Boston & Alexander Resources Limited and Mr Bulent Osman each shall:

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

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

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

36. 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.

37. The 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.

Costs

38. The applicant has been successful and is entitled to a contribution towards its costs. I assess costs using the scale published at paragraph 10 of the Tribunal’s practice direction, as follows:

Official fee for filing the application £400
Official fees for filing evidence £150
Preparing a statement and considering the Notice of Defence £500
Preparing evidence £1300

Total £2350

39. Boston & Alexander Resources Limited and Mr Bulent Osman are jointly and severally liable for the above costs. They are ordered to pay Boston and Alexander LLP the sum of £2350. This sum is to be paid within 21 days of the period allowed for appeal or, if there is an appeal, within 21 days of the conclusion of the appeal proceedings (subject to any order of the appellate tribunal).

40. Under section 74(1) of the Act, an appeal can only be made in relation to the decision to uphold the application; there is no separate right of appeal in relation to costs.

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

Dated 1 February 2022

Allan James
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. ↩