Decision

Decision on Capitalia Private Office Limited

Published 22 January 2020

Companies Act 2006

In the matter of application No 1773 by CAPITA PLC for a change to the company name of CAPITALIA PRIVATE OFFICE LIMITED, company registration No 11159419

Background

1. The company name CAPITALIA PRIVATE OFFICE LIMITED (‘the primary respondent’) has been registered since 19 January 2018 under number 11159419.

2. By an application filed on 14 June 2018, CAPITA PLC (‘the applicant’) applied for a change of name of this company registration under the provisions of section 69 of the Companies Act 2006 (‘the Act’).

3. 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 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.”

4. The applicant requested that the primary respondent’s sole director, Mr Anil Kumar Pitalia, be joined to the proceedings under the provisions of section 69(3) of the Act. Mr Pitalia was given notice of this request and provided with an opportunity to comment or to object. No response was received from Mr Pitalia and he was joined to the proceedings as a co-respondent on 20 August 2018.

5. The applicant claims that the name associated with it is CAPITA. The applicant was incorporated on 8 December 1986 and is the parent company of an extensive number of subsidiary entities (collectively the “Capita Group”). There are 88 entities within the Capita Group which incorporate the word CAPITA as part of their company name within the UK. It is claimed that the applicant has a vast reputation and goodwill in the name CAPITA which has been extensively used by both the applicant and the Capita Group in relation to business process management and outsourcing and professional services across a broad range of sectors including local and central government, insurance, financial services, transport, education, health, ICT, HR and property. The Capita Group is the UK’s leading provider of outsourced customer management. In 2017, the Capita Group’s turnover was £4.23 billion with a profit before tax of £400.9 million. Over 90% of the Capita Group’s turnover is generated by companies which use the Capita name. The Applicant is listed on the London Stock Exchange and is a FTSE 100 company. The Capita Group’s clients include central government departments and arm’s length bodies (including the DWP, DCSF, the Health and Safety Executive, Transport for London and Criminal Records Bureau), local authorities (including Westminster City Council and Birmingham City Council) and entities including Prudential, Zurich Financial Services, Deutsche Bank, O2, the BBC, National Rail, Driving Standards Agency, retailers such as John Lewis and M&S, the travel and transport sector and utility companies.

6. The applicant claims that the primary respondent’s company name, CAPITALIA PRIVATE OFFICE LIMITED, is sufficiently similar to CAPITA such that its use in the UK would be likely to confuse or mislead the public into thinking that the goods or services provided by the primary respondent under that name are associated with, endorsed by, or in some other way, connected with the applicant, when that is not the case. This is a pleading under section 69(1)(b) of the Act. The applicant requests that the Tribunal make an order under section 73 of the Act for the name to be changed to a name which does not offend. A request for costs is also made. The applicant states that it sent a letter to the primary respondent on 01 February 2018, requesting that it enter into undertakings to take steps to change its name by 15 February 2018. A follow up letter was sent on 13 March 2018. Mr Pitalia responded on 21 March 2018 rejecting the applicant’s request.

7. The primary respondent filed a notice of defence. The primary respondent:

• denies that its company name is highly similar to CAPITA and that use of the former would be likely to confuse or mislead the public into thinking that the goods or services provided by the primary respondent are associated with, endorsed by, or in some other way, connected with the applicant.
• puts the applicant to proof of the claimed goodwill and reputation under the name CAPITA.
• relies on the defence that its name was adopted in good faith. In this connection it states that its company is a private finance vehicle of the co-respondent and is not intended for trading to the general public. Further, the dominant and distinctive part of the name, CAPITALIA, is an amalgamation of the words CAPITAL and PITALIA, the latter being the co-respondent’s surname.
• relies on the defence that the applicant’s interests are not adversely affected to any significant extent. In this connection, it reiterates that the company is not intended to be used to trade to the general public and that the names are, in any event, very different.
• requests costs.

8. The applicant is represented by Irwin Mitchell LLP. The primary respondent is represented by Wilson Gunn. Both parties filed evidence. Neither side requested a hearing; both filed written submissions in lieu.

Applicant’s evidence in chief

9. This comes from Francesca Anne Todd, the applicant’s Group Company Secretary, and is dated 28 November 2018. The main points emerging from Ms Todd’s evidence are that:

• the applicant was incorporated in 1986, and, since that time, has grown to become the UK’s largest business process outsourcing and professional services company, employing approximately 73,000 people. Its turnover is split roughly equally between the private and public sector. Its revenue (in total) was £4.17 billion in 2017, with profit before tax of £383 million. Exhibit 1 contains extracts from its company accounts for 2017 in support (exhibit FT1/1).
• the applicant owns 449 subsidiaries, 359 of which are in the UK (exhibit FT1/2-6). 88 have the word CAPITA in their names. Over 90% of the group’s turnover is generated by operations that use the name CAPITA.
• since its incorporation, the applicant has provided professional business outsourcing services to a wide range of organisations across a broad spectrum of private industry and public service sectors. It has built expertise across the spectrum of common operational processes used in typical services and organisations, including delivering and managing ICT support services, and designing and building network solutions. It is involved in other sectors including customer services, back office processes, provision of human resources, property consultancy and finance and treasury services. Ms Todd states that these services would be provided in the context of a ‘private office’. She further explains that the applicant’s expertise extends from small businesses and enterprises that are starting up to central government departments, local authorities and multinational organisations.
• the applicant currently owns 217 trade marks in the UK and EU. 15 of those contain the word CAPITA (exhibit FT 1/7-29).
• Ms Todd explains that the applicant spends a great deal of time and money building its reputation and goodwill and significant sums are spent on advertising and publicising the brand. She describes examples of advertising activities which have been undertaken (in specialist industry sector magazines and newspapers) but provides no corroborative evidence in support.
• the applicant has been involved in “work in the community”, working in partnership with the Alzheimer’s Society and The Prince’s Trust.
• the applicant has won numerous awards including Company of the Year 2003 (Royal Bank of Scotland/Sunday Times Business Awards), Winners of the Evening Standard Homes and Property Award 2006, BPO Service Provider of the Year in the National Outsourcing Association Awards 2006, Britain’s Most Admired Company by Management Today in 2008, Corporate Adviser Firm of the Year in 2007 and, also in 2007, two housing design awards. Exhibit FT1/30-32 contains an extract from the applicant’s “News” part of its website, which lists some other awards including: “Capita wins four awards at CCA Excellence Awards 2017” and “Capita wins top award at the Corporate Adviser Awards 2017”; other awards and nominations are mentioned in the exhibit.
• Ms Todd states that the applicant receives significant press coverage including in (but not limited to) UK national and regional newspapers. She says the applicant is featured or commented upon daily. Two recent examples are given in exhibit FT1/33-35: the first is from the publication Directors Talk and is dated 5 November 2018 (which is after the relevant date), which relates to Capita (reference is made to Capita Plc and Capita generally) confirming the sale of its parking management business ParkingEye – we additionally note that there are 9 other articles dated from June-October 2018 which can be clicked upon at the bottom of page; the second is from CBR Government which records the fact (on 26 October 2018, again after the relevant date) that “Capita wins £5.7 million contract from Essex NHS trust for new WAN”.
• Ms Todd states that CAPITA’s reputation is founded upon trust, reliability, integrity and stability.

10. The remainder of Ms Todd’s evidence contains submissions on the matter of the claimed similarity between the parties’ company names and criticisms of the respondent’s defences. We will not summarise those submissions here but will deal with them, as appropriate, later in this decision. Respondent’s evidence 11. This comes from Anil Pitalia, sole director of the primary respondent (and co-respondent in these proceedings) and is dated 08 April 2019. Mr Pitalia states that:

• he set up his company to be a private family office that is, for all intents and purposes, a wealth management tool.
• the choice of the company names reflects its role as a private family office for such purposes because CAPITALIA is an amalgamation of the words CAPITAL and PITALIA; PITALIA being the family name. Mr Pitalia explains that the name CAPITALIA is nothing more than a play on words which perfectly suits the reasons for, and intention behind, the company’s existence.
• the company has been used to purchase a property (a flat in London) which has been let out under the company name. A copy of the tenancy agreement, dated 26 September 2018, is provided showing the landlord as being the primary respondent (Exhibit AP-01).
• Mr Pitalia states that his company is active and holding financial assets. He provides a screen shot of the company’s bank account (Exhibit AP-02). He explains that the name showing on the bank account is CAPITALIA LIMITED due to the restriction on the number of characters allowed by the bank for this information field. The account shows a balance of £12,208.70 on 05 April 2019.
• Mr Pitalia states that his evidence shows that his company is operating under its name and that the name was adopted in good faith.

12. The remainder of Mr Pitalia’s evidence contains submissions about the claimed lack of similarity between the parties’ company names. We keep those submissions in mind. Applicant’s evidence in reply

13. This is a further witness statement from Ms Todd. It consists of submissions rather than evidence of fact. As such we will not summarise it here but will refer to the content of Ms Todd’s statement as, and when, appropriate in this decision.

Decision

14. If the primary respondent defends the application, as here, the applicant must establish that it has goodwill or reputation in relation to a name that is the same, or sufficiently similar, to that of the primary respondent’s company name such that it is likely to mislead by suggesting a connection between the latter and the applicant. If that burden is fulfilled, it is then necessary to consider if the primary respondent can rely upon any defences under section 69(4) of the Act.

The applicant’s goodwill

15. Section 69(7) defines goodwill as a ‘reputation of any description’. Consequently, in the terms of the Act, it is not limited to Lord Macnaghten’s classic definition in IRC v Muller & Co’s Margarine Ltd [1901] AC 217:

“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.”

16. The relevant date is the date of incorporation of the primary respondent which, in this case, is 19 January 2018. The applicant must show that it had goodwill or reputation at this date associated with the name CAPITA. It is clear from the evidence before us that the applicant is a long-established company which had, through the various activities described in its evidence (none of which has been challenged by the other side), acquired the necessary goodwill in the name CAPITA at the relevant date in the UK. That goodwill relates to a wide range of business outsourcing and professional services.

Similarity of names

17. As a company designation is a necessity for a registered company, the “LIMITED” element of the primary respondent’s name does not have a bearing upon the issue before us. The comparison to be made is, therefore, between CAPITA and CAPITALIA PRIVATE OFFICE.

18. The applicant states:

“The Respondent is clear to state that, as a whole, the marks are different. However, this effect is only seemingly created by the use of the words ‘private’ and ‘office’. The key distinctive element of the company name, CAPITALIA, bears distinct likeness to the Capita name. Our Capita name is not only entirely contained within the name ‘Capitalia’ but the words CAPITA and CAPITALIA have the same phonetic ending and, given the two words have no English meaning, I consider there is increased scope for imperfect recollection. Further, the inclusion of the word ‘office’ and the association this creates with businesses, increases the likelihood for confusion as business services support is an essential element of Capita’s work.”

19. It is true that CAPITALIA wholly incorporates CAPITA at its beginning and will therefore be the first to impact upon the eye and the ear in the respondent’s company name. However, the public will consider the names as wholes. The difference in length between CAPITA and CAPITALIA is quite noticeable both visually and aurally. This is because the additional three letters in CAPITALIA, although at the end of the word, create a notable point of visual contrast. We note the applicant’s contention that the words have the same phonetic ending. It is true that both words end with the syllable (ah). We further note that both words consist of the same initial two syllables (cap-it) and similar third syllable (ah/al). However, the applicant’s position tends to overlook the fact that the applicant’s name contains a total of three syllables (cap-it-ah) while the respondent’s name contains a total of five syllables (cap-it-al-ee-ah) giving rise, in our view, to a noticeable aural difference overall. In terms of the words ‘private office’ in the respondent’s name, these are entirely descriptive in nature. That said, they should not be ignored as they are clearly part of the respondent’s chosen name and do create a point of visual and aural difference, albeit differences of only minor weight in the overall comparison. Considering the names overall, we find a low degree of visual and aural similarity between them.

20. Turning to the conceptual position, we note the opponent’s contention that neither CAPITA nor CAPITALIA have any English meaning. We agree that the latter is unlikely to form any concrete concept in the mind of the public. We do not agree that CAPITA has no meaning in English. On the contrary, it is part of the Latin phrase per capita which is commonly used in the English language and means ‘per head’. We would expect the public to be aware of this meaning and therefore aware that CAPITA means ‘head’. The applicant’s name therefore has a concept which is not shared by the respondent’s name. We do not consider that the words ‘private office’ play a material role in the conceptual comparison given their entirely descriptive nature.

21. In the light of our findings above, we do not consider that the public would expect the user of CAPITALIA PRIVATE OFFICE to be connected to CAPITA even allowing for imperfect recollection. In reaching this view, we have not overlooked the applicant’s contention that the words ‘PRIVATE OFFICE’ refer to business services in which the applicant has goodwill thereby increasing the likelihood of confusion. We do not consider that this is a factor which can assist the applicant given the differences identified between the respective dominant elements CAPITA and CAPITALIA and the respective names as a whole. Further, even if we are wrong to find that the public would be aware of the meaning of CAPITA, we do not consider that the resulting neutral conceptual position between the respective CAPITA and CAPITALIA elements would be enough to counteract the visual and aural differences between the names overall. We find that the names are not sufficiently similar such as to engage s.69(1)(b). Therefore, the application must be rejected.

Defences

22. In the light of our primary finding, there is strictly no need for us to deal with possible defences. However, for the sake of completeness and, in case, our primary finding is found to be wrong, we will go on to consider the defences relied upon by the primary respondent.

Defence under section 69(4)(e) - that the interests of the applicant are not adversely affected to any significant extent.

23. To adversely affect the interests of the applicant to any significant extent, the company name must do more than just sit on the register at Companies House. In this case, the adverse effect must relate to the potential use of the company name in business.

24. To rely on the “no adverse effect” defence, it is for the respondents to show, in evidence, what the primary respondent has done or intends to do. Mr Pitalia’s defence in this regard is that the primary respondent is a private wealth management tool which will not be used as a customer facing business providing goods or services and has only been used, thus far, to purchase and rent out a property. Mr Pitalia therefore states that there can be no adverse effect upon the applicant’s business because the public will not be exposed to both parties’ names in the course of business. However, a company is not limited to a particular field of activity. Nothing prevents the respondent from altering the way in which its company is used in the future which may potentially lead to overlap into the business sector in which the applicant operates. The applicant’s evidence shows that it operates in wide ranging sectors. Therefore, had we found that the respective names were sufficiently similar, we do not consider that this defence would have been available to the respondent.

25. Of course, given our finding that the parties’ names are not similar for the purposes of s.69(1)(b), the availability of potential defences only arises if our primary finding is wrong. If we are right that the names are not similar enough to mislead, then it is inherently very unlikely that the interests of the applicant would be adversely affected to any significant extent.

Defence under section 69(4)(b)(i) - that the company is operating under the name

26. Although not pleaded in the CNA2, this defence was raised in the respondent’s evidence. We therefore consider it necessary to deal with it. We can do so briefly. The relevant date for assessing this defence is the date on which the CNA1 was filed (14 June 2018). The primary respondent must show that it was operating at that date. The evidence in support of this defence (the screenshot of the respondent’s bank account and the tenancy agreement) emanates from after the relevant date and there is no other evidence to suggest that the respondent was operating before that date. Accordingly, had we found that the respective names were sufficiently similar, this defence would not have been available to the respondent.

Defence under section 69(4)(d) – the name was adopted in good faith

27. The burden of proving that the company name was registered in good faith rests with the primary respondent; the onus is not on the applicant to prove bad faith.

28. In (1) Adnan Shaaban Abou-Rahmah (2) Khalid Al-Fulaij & Sons General Trading & Contracting Co v (1) Al-Haji Abdul Kadir Abacha (2) Qumar Bello (3) Aboubakar Mohammed Maiga (4) City Express Bank of Lagos (5) Profile Chemical Limited Rix LJ commented upon the concept of good faith:

‘48 The content of this requirement of good faith, or what Lord Goff in Lipkin Gorman had expressed by reference to it being “inequitable” for the defendant to be made to repay, was considered further in Niru Battery. There the defendant bank relied on change of position where its manager had authorised payment out in questionable circumstances, where he had good reason to believe that the inwards payment had been made under a mistake. The trial judge had (a) acquitted the manager of dishonesty in the Twinsectra or Barlow Clowes sense on a claim of knowing assistance in breach of trust, but (b) concluded that the defence of change of position had failed. On appeal the defendant bank said that, in the absence of dishonesty, its change of position defence should have succeeded. After a consideration of numerous authorities, this court disagreed and adopted the trial judge’s broader test, cited above. Clarke LJ quoted with approval (at paras 164/5) the following passages in Moore-Bick J’s judgment:

“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, in so far 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.”

28. In (1) Barlow Clowes International Ltd. (in liquidation) (2) Nigel James Hamilton and (3) Michael Anthony Jordon v (1) Eurotrust International Limited (2) Peter Stephen William Henwood and (3) Andrew George Sebastian the Privy Council considered the ambiguity in the Twinsectra Ltd v Yardley [2002] 2 AC 164 judgment. The former case clarified that there was a combined test for considering the behaviour of a party: what the party knew at the time of a transaction and how that party’s action would be viewed by applying normally acceptable standards of honest conduct.

29. In his evidence, Mr Pitalia explains that the company name was chosen to reflect its purpose as a private wealth management tool, with CAPITALIA being an amalgamation of the words CAPITAL and PITALIA; the latter being the family name. He states that the company name is nothing more than a play on words which perfectly suits the reason and intention behind the company’s existence. As at the date of Mr Pitalia’s witness statement, he sates that the company has been used to purchase a property and has been let out to a tenant with the company acting as landlord.

30. We note the following points made by the applicant:

• there is no explanation why the primary respondent is not named ‘Pitalia’, rather than ‘Capitalia’. The use of the word CAPITAL is not explained. Mr Pitalia is not based in London, the capital city of the UK.
• the notice of defence states that the company is a private family office with no intention of trading to the general public. However, the use of the company name on the tenancy agreement, being a public facing document, wholly contradicts this position.
• if the company name is truly a private vehicle with no intention to trade to the public, it should not matter what the company name is, and it is therefore surprising that the name is being so vehemently defended.

31. In relation to the applicant’s point made at the first bullet point, to our minds, Mr Pitalia has provided a plausible explanation as to why the company name was chosen. He explains that it is an amalgamation of his surname, PITALIA, and the word CAPITAL. PITALIA is clearly the co-respondent’s surname. It is also clear to us that the use of CAPITAL is intended to be a reference to money or wealth rather than to the capital city of London. The company name CAPITALIA PRIVATE OFFICE therefore appears to us to be in keeping with Mr Pitalia’s explanation as to the intention behind the registration of the company name i.e. as a private tool for the management of wealth (or capital) in the Pitalia family.

32. Insofar as the applicant’s point at the second bullet point is concerned, we do not consider Mr Pitalia’s explanation for the adoption and incorporation of the company to be undermined by use of the company name on, what appears to be, a private tenancy agreement. Such use appears to us to be consistent with Mr Pitalia’s intentions to use the company to manage his private wealth, which may, in our view, reasonably include the purchasing and/or letting out of private property.

33. As to the point made by the applicant at the third bullet point, we do not consider that the applicant’s surprise at the name being defended is relevant to determining whether the name was adopted in good faith.

34. We find that the good faith defence is made out.

Overall outcome

35. Given our primary finding that the respective company names are not sufficiently similar such as to engage s. 69(1)(b) and our finding that the company name was, in any event, adopted in good faith, the application fails.

Costs

36. The respondents have been successful and are entitled to a contribution towards their costs. Taking into account the guidance in the scale of costs set out in the Tribunal’s Practice Direction, we award the following:

Official fee - CNA2 (Notice of Defence): £150
Preparing a statement and considering the other side’s statement: £300
Preparing evidence and considering the other side’s evidence: £500
Official fee - CNA3 (Notice of giving evidence): £150
Total: £1100

37. Capita PLC is ordered to pay Capitalia Private Office Limited the sum of £1100. This sum is to be paid within 21 days of the expiry 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 appellant tribunal).

38. Under section 74(1) of the Act, an appeal can only be made in relation to the decision to dismiss the application; there is no right of appeal in relation to costs. 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 or to the Court of Session in Scotland. The Tribunal must be advised if an appeal is lodged.

Dated 14th January 2020

Beverley Hedley
Company Names Adjudicator

Judi Pike
Company Names Adjudicator

Mark Bryant
Company Names Adjudicator