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Companies Act 2006

In the matter of application no. 3314 for a change of company name registration no. 12386733 and in the matter of application no. 3315 for a change of company name registration no. 12532418

1. This decision concerns company name registration numbers 12386733 鈥淭HOMSON ENVIRONMENTAL CONSULTANTS LIMITED鈥� (鈥渢he first respondent鈥�) and 12532418 鈥淭HOMSON ENVIRONMENTAL CONSULTANTS EOT LIMITED鈥� (鈥渢he second respondent鈥�; collectively, 鈥渢he respondents鈥�). These names have been registered since 6 January 2020 and 24 March 2020, respectively. The matters come before us by way of applications filed on 27 October 2020 by THOMSON ENVIRONMENTAL SERVICES LIMITED (鈥渢he applicant鈥�) under section 69 of the Companies Act 2006 (鈥渢he Act鈥�). The applications were consolidated.

2. The applicant claims that it has traded as 鈥淭homson Environmental Services鈥� for over 25 years in the UK and that it has goodwill in relation to the following goods and services:

Water treatment products and services; water disinfection services; plumbing services; chlorination services; site surveys; water sampling; water analysis; water quality reports; laboratory services; health and safety advisory services relating to the use and storage of water stored within buildings; advisory and consultancy services in relation to the use and transportation of water; advisory and consultancy services in relation to water compliance issues; consultancy and advisory services in relation to the prevention of Legionella bacteria from contaminating water supplies and the removal of Legionella bacteria from water supplies; engineering and remedial services in relation to water supply and storage systems; training services in relation to health and safety legislation and practice; risk assessment and audit services in relation to water treatment and water hygiene.

3. The applicant says that the names 鈥淭homson Environmental Consultants Limited鈥� and 鈥淭homson Environmental Consultants EOT Limited鈥� are sufficiently similar to the name 鈥淭homson Environmental Services鈥� that their use in the UK would be likely to mislead by suggesting a connection between the respondents and the applicant where none exists. The applicant points out that the respondents have at least one director in common with Thomson Ecology Limited, which was located in the same building as the applicant and which at the date of the applications was still located on the same Surrey research park as the applicant. The applicant asks that the name be removed from the Companies Register and be changed to a name which is not offending.

4. The respondents filed notices of defence denying the applicant鈥檚 grounds, in which they deny that the applicant has a protectable goodwill in the words 鈥淭homson Environmental鈥� as part of its company name and put the applicant to proof. The respondents also claim that:

• materially similar names were registered by the controlling parties of the respondents (mainly Nancy Thomson) prior to the date on which the applicant claims to have acquired goodwill;
• the respondents鈥� names were adopted in good faith, with the word 鈥淭homson鈥� being shared with other companies in the respondents鈥� group and having been used as a brand since 1978;
• 鈥淭homson鈥� existed within a succession of company names prior to the incorporation of the applicant in 1993, all of which names were adopted in good faith, 鈥淭homson鈥� being the personal name of Ms Thomson, who has enjoyed a leading personal reputation in the field of environmental science;
• 鈥淓nvironmental鈥� is descriptive of the field of expertise and attracts no goodwill;
• no connection will be inferred between the applicant and the respondents in the absence of evidence of confusion or association and the interests of the applicant are not adversely affected. It adds that, in the case of Thomson Environmental Consultants EOT Limited, the company is an employee ownership trust which does not itself provide environmental services

5. The respondents indicate that they rely on the defences under ss. 69(4)(b), (d) and (e) of the Act.

6. Both parties filed evidence. A hearing was held before us on 16 November 2021, at which the applicant was represented by Chris McLeod of Elkington and Fife LLP and the respondents by Laurie Heizler of Moore Barlow LLP.

7. Both parties seek an award of costs.

Witnesses

8. The applicant鈥檚 evidence is provided by Robert Bardsley-Smith, the managing director of the applicant. His evidence consists of a witness statement with accompanying exhibits RBS1 to RBS10. Mr Bardsley-Smith gives evidence about the applicant鈥檚 business, as well as some information about the respondents and related companies.

9. The respondents filed evidence from two witnesses. The first is Nancy Elizabeth Thomson, whose witness statement is accompanied by exhibits numbered NET1 to NET8. Although Ms Thomson does not state her position, she appears to be the same Nancy Thomson identified as a director of the respondents: her evidence is given from her 鈥渙wn personal knowledge of the respondents and other companies that I have been involved with that are connected to the Respondents and of the history of my involvement over many years with environmental consultancy businesses that have traded using my family names as part of a company name or trading name鈥�. Ms Thomson鈥檚 evidence concerns previous businesses which used the 鈥淭homson鈥� name and the rationale for the adoption of the names at issue.

10. The respondents鈥� second witness is Heidi Kane who had, at the date of her statement in June 2021, been the receptionist for the group of companies branded 鈥淭homson Environmental Consultants鈥� for seven years. Her evidence relates to some instances of misdirected post and telephone calls.

11. None of the witnesses was cross-examined.

Legislation

12. Section 69 of the Act reads:

1. (1) A person (鈥渢he applicant鈥�) may object to a company鈥檚 registered name on the ground鈥�
   
   (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鈥�
   
   (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鈥�
   
   (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 鈥済oodwill鈥� includes reputation of any description

Goodwill

13. The applicant must establish that it has goodwill or a reputation in relation to a name that is the same, or sufficiently similar, to that of the company name suggesting a connection between the company and the applicant. Although the respondents accept that the applicant provides the services claimed, they appear to dispute whether this amounts to a protectable goodwill and that the goodwill is in a relevant field of business.

14. Section 69(7) of the Act defines goodwill as a 鈥渞eputation of any description鈥�. Consequently, in the terms of the Act goodwill is not limited to Lord Macnaghten鈥檚 classic definition in IRC v Muller & Co鈥檚 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.

15. The relevant date is the date of incorporation of the respondents which, in this case, is 6 January 2020 for the first respondent and 24 March 2020 for the second respondent. The applicant must show that it had a goodwill or reputation at these dates associated with the name 鈥淭homson Environmental Services鈥�.

16. The applicant was incorporated on 9 December 1993 (RBS1). Mr Bardsley-Smith鈥檚 evidence is that the applicant has traded continuously in the UK since that date and that the business relates to water treatment products and services. Prints from the applicant鈥檚 website, www.thomsonwater.co.uk, show that 鈥淭HOMSON ENVIRONMENTAL SERVICES鈥� featured prominently on web pages between August 2010 and August 2020 (RBS2). These prints also refer to the company having operated since 1993. The web pages describe the company as 鈥淲ater Quality Engineers鈥� and indicate that 鈥淓ssentially, the Company provides Health & Safety Services related to the use of water stored and used within buildings鈥�. Services such as legionella control, laboratory analysis, engineering services and consultancy are mentioned. We also note that there is mention of water hygiene and general water treatment products from 2010 to 2014 and that subsequently the website indicates that the applicant provides building owners, managers, engineers and maintenance staff with 鈥渁ll the necessary products & services鈥� to comply with water compliance regulations. A company brochure and letterhead, both of which show 鈥淭HOMSON ENVIRONMENTAL SERVICES鈥�, are also in evidence (RBS4). The evidence is that the brochure and letterhead have been used and circulated in the UK for at least 20 years (the date of Mr Bardsley-Smith鈥檚 statement is 1 April 2021). The brochure describes a number of water hygiene services and indicates that the applicant will supply replacement pipework or equipment. We note that past and current clients include London NHS Trusts, hotel groups, property management firms, public bodies and institutions such as Imperial College, although it is not clear when the applicant provided its services to these customers.

17. Annual turnover has been in excess of 拢1 million each year between 2015 and 2020. Between 2015 and 2020, the applicant鈥檚 advertising and marketing expenditure was between 拢8,300 and 拢13,100 per annum. Five invoices dated between January 2015 and May 2019, each to a different company, show water hygiene and safety works, testing and risk assessment (RBS3). The invoices total almost 拢33,000, inc. VAT.

18. Although the evidence is rather limited, in view of the use of the name 鈥淭homson Environmental Services鈥� on the applicant鈥檚 website since at least 2010, together with the turnover figures, supported with some invoices, and advertising spend, we are satisfied that at the relevant dates the applicant had a qualifying goodwill of which 鈥淭homson Environmental Services鈥� was distinctive. On the turnover and advertising figures before us, we consider that the strength of the goodwill was modest. The business appears to offer primarily water treatment services. We note that some products are mentioned in the evidence. Whilst some of the equipment available through the applicant is likely to be branded with third-party marks, other goods, such as pipework, are unlikely to be branded in such a way or to have visible branding once fitted and customers are likely to hold the applicant responsible for their proper performance (or to contact the applicant in the event of their failure). The area of business was 鈥渨ater treatment products and services; consultancy services in relation to the aforesaid鈥�. Are the names sufficiently similar to mislead?

19. The contested names are 鈥淭homson Environmental Consultants Limited鈥� and 鈥淭homson Environmental Consultants EOT Limited鈥�. Ms Thomson accepted in her witness statement that 鈥淭homson鈥� is the distinctive part of the respondents鈥� names. We agree. 鈥淟imited鈥� merely indicates the corporate status of the company and is not a significant difference. Similarly, in the context of a company name, 鈥淓OT鈥� indicates that the company is an employee ownership trust and has little weight, whilst 鈥淓nvironmental Consultants鈥� describes the services provided by the company. The applicant鈥檚 name also contains two descriptive words, 鈥淓nvironmental Services鈥�, which indicate the services provided by the company. 鈥淭homson鈥� is the most distinctive part of the applicant鈥檚 name. The contested names and the applicant鈥檚 name coincide in the most distinctive element, as well as in the word 鈥渆nvironmental鈥�. Although there are differences between the names, these differences are, at best, non-distinctive. Whilst the differences will not be entirely overlooked, the contested names are both highly similar overall to the applicant鈥檚 name.

20. Ms Thomson says that she is aware of the applicant and what it does but argues that the services of the applicant do not overlap with those of the respondents. Although she accepts that in the early 1990s Thomson Laboratories, another company with which she was associated, offered legionella testing services (NET8; see also NET5), she says that the companies in the group now offer environmental services in the 鈥渙utdoors鈥� environment and that none of them would deal with 鈥渋ndoor鈥� matters such as building water services or legionella.

21. It is appropriate to take into account the nature of the goodwill relied on by the applicant. The use in s. 69(1) of the words 鈥渁 name associated with the applicant in which he has goodwill鈥� indicates that the applicant鈥檚 goodwill is to be considered in the assessment of whether use of the contested name is likely to mislead. By contrast, the nature of a respondent鈥檚 business is not usually an important factor in the assessment of whether use of the contested name is likely to mislead. This is because (a) although a company鈥檚 main business activities are recorded in the register of companies, this does not prevent companies from conducting other activities, and (b) a respondent鈥檚 current business plans do not constrain its future commercial activities. In some cases, a respondent鈥檚 business interests can clearly be discerned from the company name itself, which may be relevant: for example, a company called 鈥淪mith鈥檚 Tyre Repair鈥� is unlikely to offer services other than tyre repair. In this case, however, whilst 鈥淓nvironmental Consultants鈥� indicates the services, it is barely distinguishable from the applicant鈥檚 鈥淓nvironmental Services鈥�.

22. When determining whether there is a likelihood of a misrepresentation, it is also appropriate to take into account evidence of, or of the absence of, actual confusion. Ms Kane gives evidence about instances of confusion of which she is aware in her capacity as receptionist in premises branded 鈥淭homson Environmental Consultants鈥�, on the same Surrey research park where the applicant is based. It appears from Ms Thomson鈥檚 evidence of the rebranding of the companies, and from Mr Bardsley-Smith鈥檚 evidence (particularly RBS5 to RBS9), that the name 鈥淭homson Environmental Consultants鈥� was not used until at least April 2019, the premises previously being labelled 鈥淭homson Ecology Limited鈥�. Ms Kane says that there have been the following problems with postal communications:

• occasional delivery of letters addressed to the applicant to the respondents;
• delivery of a parcel intended for a company in the respondents鈥� group to the applicant in March 2020;
• delivery of three parcels intended for the applicant in error, in or around May 2019

23. Around six phone calls which may have been intended for the applicant have been received by the respondents, as follows:

• one caller wanting a plumber;
• one phone call asking about domestic water testing in July 2020;
• one caller asking about legionella testing (Ms Kane says this was almost certainly for the applicant);
• one phone call about the return of a key;
• voicemails in February 2021 about the failure of heating and hot water systems in a residential building

24. Ms Kane explains that misdirected post and telephone calls have also been received by the respondents for companies other than the applicant.

25. Instances of the incorrect delivery of post are not relevant, as they do not disclose the behaviour of potential customers. The same applies to a misdirected telephone call about a key. However, where potential customers have contacted the respondents mistakenly believing them to be or to be connected with the applicant, that is potentially relevant evidence of confusion. That said, the evidence before us does not explain how the callers came to contact the respondents, whether they contacted the respondents in the belief that they were contacting the applicant, or whether they were simply enquiries as to whether the respondents (or one of them) provided the services required. We do not consider that Ms Kane鈥檚 evidence is of particular assistance either way. 26. In our view, even in the absence of any evidence of confusion, there is a strong prima facie case that those familiar with the applicant鈥檚 goodwill under 鈥淭homson Environmental Services鈥� are likely to mistake the contested names for the applicant鈥檚 name, leading the public to believe that the services provided by the respondents are provided by the applicant when they are not. This is because all of the names share the words 鈥淭homson Environmental鈥� and the remaining parts of the names are insufficiently distinctive to enable the user of the services to distinguish between the company names. Consequently, we find that the applicant鈥檚 case satisfies s. 69(1)(b) of the Act.

Defences

26. As the ground specified in subsection 69(1)(b) is established, the onus switches to the respondents to establish whether they can rely on any of the defences pleaded. The respondents rely upon the defences identified at sections 69(4)(b), (d) and (e) of the Act. The primary defence is that the name was adopted in good faith. That is where we will begin. Section 69(4)(d): that the name was adopted in good faith

27. It is for the respondents to show that the contested name was adopted in good faith. This is evident from the wording of s. 69(4) of the Act, which reverses the usual persuasive and evidential burdens in civil law cases, where good faith will normally be presumed and bad faith must be proven by the person alleging it. The reverse burden is justified by (a) the purpose of the legislation 鈥� which is to prevent the opportunistic registration of company names (also known as 鈥渃ompany name squatting鈥�), and (b) the practical difficulty that applicants would face if they had the burden of showing that a (usually unused) company name was adopted for opportunistic reasons. It should be easy for a respondent to explain its purpose in registering a name and to provide information in support, such as business plans. By contrast, it would usually be very difficult for an applicant to establish what a respondent鈥檚 motives were in registering the name. The legislature has addressed this difficulty by providing sufficient defences so that anyone acting in good faith can avoid the consequences of adopting a name which is the same as, or similar to, one in which someone else has associated goodwill.

28. In Niru Battery Manufacturing Company & Anor v Milestone Trading Ltd & Ors [2003] EWCA Civ 1446, a case concerning a payment in error to the defendant bank and an authorised payment out in questionable circumstances, where the manager had good reason to believe that the inwards payment had been made under a mistake, Clarke LJ considered the requirement for good faith and quoted the following comments of Moore-Bick J with approval at [164]:

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.

Evidence

29. Ms Thomson鈥檚 evidence is that the words 鈥淭homson Environmental Consultants鈥� were chosen for reasons 鈥渂ased on the goodwill that the Respondents benefitted from, on account of the extensive use made of 鈥楾homson鈥� and 鈥楾homson Environmental鈥� by companies led and managed by me for many years before the Applicant was incorporated鈥�. Her evidence includes a business plan dated 1991 for 鈥淭homson Laboratories鈥�, which mentions the establishment of the business in 1978 for 鈥渋ndependent sampling, analysis and consultancy on environmental issues鈥� (NET1). At the time of the business plan there were five offices in the UK. Ms Thomson explains that 鈥淭homson Laboratories鈥� became a limited company in 1979, presenting itself as 鈥渋ndustrial pollution consultants鈥� and 鈥渃onsulting environmental scientists鈥�. It was sold in 1992 and the merged company became 鈥淭homson MTS Limited鈥� (NET3). Ms Thomson says that the company also used the trading name 鈥淭homson Environmental鈥�. A stack emission testing brochure said to have been produced in 1992 supports these statements (NET4); a wider range of services are detailed in a brochure showing the 鈥淭homson Laboratories鈥� name which is said to be dated 1992-1993 (NET5). Ms Thomson was appointed a director in 1992 (NET6). The company was sold again in 1993 after which it traded as RPS Thomson Ltd before its dissolution in 1993.

30. In addition to the respondents, Ms Thomson is a director of Thomson Ecology Limited (company number 4477751) (鈥淓cology鈥�), Thomson Unicomarine (company number 2296072) (鈥淯nicomarine鈥�) and Thomson Habitats Limited (company number 6080718) (鈥淗abitats鈥�) (collectively, 鈥渢he group companies鈥�). These companies are all owned by Thomson Environmental Consultants Limited (i.e. the first respondent). Ms Thomson says that in 2019 it was decided to transfer the ownership of the group companies to their employees, under an employee ownership trust. The respondents were set up as an umbrella company and a trust company to hold the shares on behalf of the employees. This arrangement was finalised in 2020 when the respondents were incorporated; the 鈥減erson with significant control鈥� for the group companies is the first respondent.

31. Ms Thomson explains that Ecology was incorporated in 2002 as NVT Environmental Limited, changing its name to Thomson Ecology Limited the following year. It was intended to assist developers in managing the conflicting interests of their projects and wildlife on site. It appears that, at the date of Ms Thomson鈥檚 statement in June 2021, the company continued to trade, focusing on survey, sampling, analysis and consulting in the field of terrestrial and freshwater ecology. Unicomarine is a company offering survey, sampling, analysis and consulting in marine benthic (sea-bed flora and fauna) taxonomy and was purchased by Ms Thomson and/or one of her companies in 2010. It is said to provide analysis of benthic samples and advice on projects that might affect marine wildlife. Habitats was incorporated in 2007 to address a need from clients for 鈥渁 reliable contractor to clients to enable the physical implementation of on-site ecological plans in compliance with planning conditions鈥�, which Ms Thomson describes as 鈥渆cological contracting鈥�.

32. Ms Thomson says that the group companies have offices in Cardiff, Birmingham, Manchester, Leeds and Guildford and that (at the date of her statement) additional services were offered, such as environmental impact assessments. Turnover for the financial year ending in October 2020 was over 拢10 million and is said to be increasing rapidly.

33. Ms Thomson says that the group companies now use 鈥淭HOMSON ENVIRONMENTAL CONSULTANTS鈥� as the overall brand. A trade mark application was filed on 16 April 2019 for 鈥淭HOMSON ENVIRONMENTAL CONSULTANTS鈥�, under number 3392729. Ms Thomson says that:

The rebranding took place just over two years ago in order to demonstrate that the Group offers much more than just ecology consultancy and habitat management. The brand was also intended to preserve the continuity and goodwill derived from earlier environmental consultancy entities that used my 鈥淭homson鈥� surname since 1978. The word 鈥淭homson鈥�, which is the distinctive component of the Respondent鈥檚 corporate names and of the Trade Mark, is of course my surname. Given my key involvement with the Proprietor, the other Group companies and of course the other entities that have existed since 1978, it is logical that my name appears as part of the Proprietor鈥檚 corporate name as well as being the distinctive component of the registration. Goodwill in 鈥淭homson鈥� has been shared throughout all these companies and has extended to the registration [鈥�]. There has been no misrepresentation of the Applicant鈥檚 name since the use of 鈥淭homson鈥� by any Group companies has been the natural and obvious choice in the light of the history I have set out in this statement and my personal association with the provisions of environmental science services.

34. Ms Thomson adds that all the principal decisions relating to trading as a succession of environmental consultancy companies have been hers. Prints from the Blue Newt magazine, billed as 鈥淎 Thomson Environmental Consultants Publication鈥� from Spring/Summer 2020, show that Ms Thomson is the editor. We note that the company describes itself as 鈥渓eading experts in environmental compliance鈥�.

Assessment

35. It is clear that Ms Thomson has been involved with a number of companies since 1978, albeit with a hiatus between 1993 and 2003, all of which have featured 鈥淭homson鈥� as part of their name. Ecology, Unicomarine and Habitats were all established by 2010 and were still operating at the relevant dates using 鈥淭homson鈥� as part of their names. The fact that 鈥淭homson鈥� is Ms Thomson鈥檚 surname is an obviously plausible reason for its adoption in those company names. Further, the circumstances of the incorporation of the respondent companies described by Ms Thomson are consistent with the creation of umbrella and shareholding vehicles which would still be identifiable as part of the wider group of 鈥淭homson鈥� companies. In our view, the respondents have discharged the burden of showing that their reasons for choosing the respondents鈥� names were legitimate.

36. We would add that we have considered Mr Bardsley-Smith鈥檚 evidence that Ecology had been trading in close geographical proximity to the applicant (RBS8-10) and that the respondents were aware of the applicant鈥檚 business, as accepted by Ms Thomson. We also recognise that the contested names share more similarity with the applicant鈥檚 name, albeit in non-distinctive elements, than previous company names. However, we do not consider these factors sufficient to disturb our finding that the companies were incorporated in good faith as logical extensions to longstanding businesses of which Ms Thomson鈥檚 surname had been a recurring feature. The defence is made out.

37. In view of our findings, we do not consider it necessary to consider the remaining defences.

Outcome

38. The applications have failed.

Costs

39. As the respondents have been successful, they are entitled to a contribution towards their costs, based upon the scale of costs published in paragraph 10.1 of the Practice Direction. We award costs to the respondents on the following basis:

Preparing a statement and considering the applicant鈥檚 statement (拢300 x 2): 拢600
Fee for filing CNA2 (拢150 x 2): 拢300
Preparing evidence and considering the applicant鈥檚 evidence: 拢800
Fee for filing evidence: 拢150
Preparing for and attending the hearing: 拢800

Total: 拢2,650

40. We order Thomson Environmental Services Limited to pay Thomson Environmental Consultants Limited and Thomson Environmental Consultants EOT Limited jointly the sum of 拢2,650 within 21 days of the expiry of the appeal period, or within 21 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 dismiss the applications; there is no right of appeal in relation to costs. The company adjudicator must be advised if an appeal is lodged.

Dated 7 February 2022

Heather Harrison
Judi Pike
Christopher Bowen
Company Names
Adjudicator