LendInvest Limited v Lend and Invest Limited
| Case Outcome | Application successful |
| Respondent | Lend and Invest Limited |
| Registration Number | 11167210 |
| Administrative Decision Number | O/651/19,11167210 |
| Court | Company Names Tribunal (EW) |
| Date | 25 October 2019 |
In the matter of application No. 1691 by LendInvest Limited
For a change of the company name of registration No 11167210
Background, claims and defences1. LEND AND INVEST LIMITED (hereafter ‘the primary respondent’) was incorporated on 24 January 2018.
2. On 20 February 2018, LendInvest Limited (hereafter ‘the applicant’) applied for an Order under section 69 of the Companies Act 2006 (‘the Act’) for the company name LEND AND INVEST LIMITED to be changed.
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 these 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 director, Mr Naeem Tabassum, be joined to the proceedings under the provisions of section 69(3) of the Act. Mr Tabassum was given notice of this request and provided with an opportunity to comment or to object. No response was received from Mr Tabassum and he was joined to the proceedings as a co-respondent on 25 April 2018.
5. The applicant claims that the name associated with it is LendInvest, in relation to “mortgage lending”, “invest management”, “financial intermediation” and “provision of an online investment platform”.
6. In its Form CNA1 statement of claim the applicant claims that it has traded since its incorporation on 17 July 2012. It claims to have since become one of the UK’s largest non-bank mortgage lenders. The applicant states that LendInvest Limited is the direct or indirect 100% shareholder of 16 other UK companies whose name include the word “LendInvest”, with the applicant being the ultimate holding company of the group.
7. The applicant claims to have more than 19,000 individual users registered on its online investment platform which receives around 37,000 individual visits per month. It claims that to date it has invested £1.2billion in loans, helping to bring 4,000 new or improved homes into the UK market. In terms of turnover it claims that in its annual report, up until 31 March 2017, it had revenue of £40m.
8. The applicant argues that the primary respondent’s name is sufficiently similar to its name and is, therefore, likely to mislead by suggesting a connection between them. The applicant requests that the Tribunal make an order under section 73 of the Act for the name to be changed which does not offend [footnote 1].
9. The respondent filed a counterstatement (Form CNA2) denying the claims made. Section 2 of the counterstatement asks which of the applicant’s allegations the primary respondent admits or denies. The primary respondent’s answer was states that, “LendInvest Limited is a well established mortgage provider and online investment platform with billions of assets under its management. In contrast, “LEND AND INVEST LIMITED” is a small start-up company that has not venue launched yet.”
10. Section 3 of the counterstatement specifically asks the respondent to set out any defences upon which it wishes to rely upon. It ticked the boxes for the following defences:
- The primary respondent is either, 1) operating under the name [footnote 2], 2) proposing to do so and has incurred substantial start-up costs in preparation [footnote 3], or 3) was formerly operating under the name and is now dormant [footnote 4];
- That its name was registered in the ordinary course of a company formation business and the company available for sale to the applicant on the standard terms of that business [footnote 5];
- That its name was adopted in good faith [footnote 6];
- That the interests of the applicant are not adversely affected to any significant extent [footnote 7].
11. The applicant’s evidence consists of a witness statement and 6 exhibits from Mr Richard Michael Woods who is its acting General Counsel.
12. Mr Woods reiterates the statements made in the statement of claim regarding the number of individual users and visits per month. He also refers to three awards that the applicant has received but it is not clear whether these are UK related awards.
13. Mr Woods’s witness statement makes specific reference to Mr Tabassum being an ex-employee of the applicant. To evidence this, exhibit RMW1 to Mr Woods’s witness statement is a letter dated 8 February 2018 from the applicant to Mr Tabassum. It is noted that the letter states: “Separately, we remind you that your contract of employment with LendInvest Limited, dated 30 June 2015, contains confidentiality provisions which apply indefinitely following the termination of your employment with LendInvest Limited.” Exhibit RMW2 consists of Mr Tabassum’s reply dated 20 February 2018. The letter states that that “You have reminded me the according to my contract with LendInvest Limited, dated 30 June 2015, I am subject to confidentiality provisions which are applicable indefinitely. I have served all the terms, I agreed at the time of ending my work with LendInvest Limited. During my “Garden Leave” and six months following my “Notice Period” I have not worked for any direct or indirect competitors of LendInvest Limited.” In Mr Tabassum’s evidence he makes reference to the claim that he is an ex-employee but does not deny this. In fact, attached to his counterstatement is a heavily redacted copy of the applicant’s letter of 20 February 2018.
14. The respondent filed a witness statement by Mr Tabassum with no accompanying exhibits. The witness statement mainly consists of submissions which we shall not summarise here. However, we confirm that we have read the witness statement and take it’s content into account.
Decision Goodwill15. 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 respondent’s company name to suggest a connection between the company and the applicant. Only if this burden is fulfilled is it then necessary to consider if the respondent can rely upon defences under section 69(4) of the Act. The relevant date is the date of incorporation of the contested company which, in this case, is 24 January 2018. The applicant must show that it had a relevant goodwill or reputation at this date.
16. Section 69(7) of the Act 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 of goodwill in IRC v Muller & Co’s Margerine 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.
17. As previously stated the primary respondent refers to the applicant as having “billions of assets [footnote 8]” under its management. It also seeks to rely upon the vast difference in company sizes as being a defence to its company registration (which I shall address later). Further, Mr Tabassum, the co-respondent, was an employee of the applicant prior to being placed on gardening leave [footnote 9]. All of this indicates that there is no dispute that the applicant is an operating business which has acquired goodwill under the name LendInvest.
18. In view of the above, we find that the applicant has the requisite goodwill at the date of incorporation of the contested company name.
Does the respondent’s company name suggest a connection between it and the applicant?19. The respondent’s name is LEND AND INVEST...
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