Decision on Close Bros Invoice Finance Limited

Order under the Companies Act 2006

Regarding application no. 3755

By Close Invoice Finance Limited

For a change of registration name

No. 13328837

Background

1. The name CLOSE BROS INVOICE FINANCE LIMITED is registered since April 12, 2021 under number 13328837 (“the main defendant”). The Companies House website lists two directors, namely David Lawrence Fabb and Greg Taft.

2. By an application filed on December 17, 2021, Close Invoice Finance Limited (“the applicant”) requested a change of name of this registration pursuant to the provisions of s. 69(1) of the Companies Act 2006 (“the Act”). The plaintiff is represented by Addleshaw Goddard LLP.

3. A copy of the Application was sent to the registered office of the Lead Respondent on 4 February 2022, pursuant to Rule 3(2) of the Company Names Arbitration Rules 2008 (“the Rules”). The lead respondent has been granted until March 4, 2022 to file a defense on Form CNA2 together with the official fee of £150. I note that the letter contained the following (emphasis in original):

If you choose not to file a CNA Form 2 and the £150 fee, the arbitrator may treat the claim as unopposed and may make an order under section 73(1) of the Companies Act of 2006.

If you decide not to defend the name of your company, the request will normally be accepted. A decision in favor of the plaintiff will normally include an award of costs in favor of the plaintiff, provided that costs have been requested by the plaintiff.

4. On the same day the court wrote to MM. Fabb and Taft to inform them that the plaintiff had requested to be joined in the proceedings as co-defendants. They had until March 4, 2022 to comment on this request.

5. Neither the lead respondent nor the co-respondents responded to the letters from the court. Accordingly, on March 18, 2022, the court wrote to the main defendant informing him that,

Since no CNA 2 was filed within the time limit, pursuant to Rule 3(4), the Adjudicator may treat the claim as unopposed and may make an order under Rule 73(1). ) of the Companies Act 2006.

6. The Lead Respondent was also advised that either party had a right to be heard under Rule 5(3) and that a hearing could be requested by filing a CNA4 Form (” Request to appoint a hearing”). , with accompanying fee of £100, by 1 April 2022 at the latest.

7. The court also wrote to MM. Fabb and Taft on March 18, 2022, confirming that they had been joined as co-defendants and that this decision could also be appealed by filing a CNA4 form and costs before April 1, 2022.

8. On March 30, 2022, the main defendant filed a Form CNA4. It was completed by Mr. Fabb. The failure to submit the CNA2 form was not explained, either on the CNA4 form or in the letter accompanying the CNA4 sent to the applicant’s representatives.

9. On April 25, 2022, the Court wrote to the parties expressing its view that the Lead Defendant had exercised his right to a hearing and appointed a Case Management Conference (“CMC”) for Friday May 6, 2022 to to discuss the principal defendant’s failure to file a CNA2 form. The letter included the following (original italics):

[…] The purpose of the CMC is to determine whether the procedure should continue; it is not a decision on the merits of the claimant’s claim. The arbitrator has discretion to extend any time limit under Rule 7, including that for filing a counter statement, but there is no discretion to waive the requirement for a counter statement (which must be filed on a CNA2 form). The arbitrator will therefore require the respondent to file a Form CNA2 and counter statement, along with a witness statement explaining why the deadline was not met, no later than 2 p.m. on May 4, 2022. These documents must be copied to the applicant. The respondent must also be prepared to explain to the CMC why the arbitrator should now exercise his discretion in favor of the respondent.

10. A CNA2 form was filed on May 4, 2022 but without a witness statement.

11. The CMC met before me as scheduled, via conference call. The principal respondent was represented by Mr. Fabb. The plaintiff was represented by Rayan Fakhoury, a lawyer appointed by Addleshaw Goddard.

Decision

12. The relevant rules are as follows:

3(3) The arbitrator shall set a time limit within which the main respondent must file his defence. (4) The main defendant, before the end of this period, must file a counter statement in the appropriate form, failing which the arbitrator may treat it as not opposing the claim and may make an order under of section 73(1).

[…]

7(1) The Adjudicator may extend (or further extend) any period which has been specified under any provision of these Rules even if the period has expired.

(2) Any party may request an extension of any time limit specified under any provision of these Rules.

(3) Any request for a retroactive extension must be filed before the expiry of the period of 2 months from the date of expiry of the period in question.

(4) Any request made under subsection (2) must be made on the appropriate form and must include the reasons why the additional time is required. A request for retroactive extension must also include the reasons why the request is made out of time.

13. I have decided after hearing the parties that I will not exercise my discretion to extend the time limit for filing Form CNA2 and that the application will be proceeded with without opposition. My decision meant that some of the issues discussed or to be discussed at the CMC became moot, including the plaintiff’s request for security for costs. In addition, Mr. Fakhoury had filed in advance a summary argument and, for the most part, relied on the conclusions contained therein. Accordingly, I do not intend to repeat all of the arguments presented to the CMC, but will focus on those that are relevant to my decision. I must add that, although Mr. Fabb complained that he had only received the skeleton of the argument the day before (at the same time as the court), he confirmed that he had read it. I briefly gave the reasons for my decision to the CMC and said that I would give my full reasons in writing. What I do now.

14. Mr. Fabb did not dispute that the principal defendant had received the CNA1 form and the covering letter from the court. However, he said there were extenuating circumstances for the failure to file the CNA2 form. First of all, he had been very busy preparing a brief for legal proceedings for a period of three months. He was unaware of the delay in filing the CNA2 form which, he agreed, was due to him not reading the letter properly. Secondly, Mr. Fabb indicated that he had no funds because he had spent considerable sums on other procedures.

15. I recognize that mistakes are sometimes made, but it is an inadequate response to assert that official correspondence relating to company assets was simply not read carefully. It seems that there was no system for checking or recording official correspondence and that the deadline was not respected due to lack of a minimum of vigilance in reading official correspondence. In this, the main respondent is the author of his own misfortune.

16. With regard to Mr. Fabb’s financial embarrassment, while an inability to raise funds may be relevant in certain circumstances, I doubt this applies where the choice has been made to spend the monies on d other procedures, particularly in the absence of clear evidence that there were, for example, short maturities which led to a temporary cash flow difficulty. However, this misses the most important point in this case, which is that even if sufficient funds had been available, it would not have helped, as the lead respondent was unaware of the deadline, through no one’s fault but his own. Even if these reasons had been provided in the form of a witness statement, in accordance with the express direction of the court, I did not consider them to constitute a good reason to exercise my discretion under Rule 3 (4) or 7(1) .

17. Therefore, in accordance with art. 73(1) of the Act, I make the following order:

  • CLOSE BROS INVOICE FINANCE LIMITED will change its name within one month from the date of this order to a name that is not offensive;
  • CLOSE BROS INVOICE FINANCE LIMITED, Mr. David Lawrence Fabb and Mr. Greg Taft must each:
  • take such steps as are within their power to effect or facilitate the effecting of such change;
  • not cause or allow any action to be taken to cause another company to register under a name which is an offensive name.

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

19. In any case, if no change is made within one month of the date of this order, I will determine a new company name in accordance with art. 73(4) of the Act and will give notice of this change under s. 73(5) of the Act.

20. All respondents, including individual co-respondents, have a legal obligation under s. 73(1)(b)(ii) of the Act not to cause or permit any action to be taken which would result in the registration of another company under an offensive name; this includes today’s society. Failure to comply may result in legal action for contempt of court and may result in a custodial sentence.

Costs

21. The Claimant contacted the First Respondent on November 12, 2021 to advise that unless the First Respondent changed its corporate name, proceedings would be commenced in this court. I therefore see no reason to deny the applicant, as the winning party, an award of costs. The candidate requests a bonus on the scale. She is asking for £400 to prepare the claim and £600 to attend the hearing. I understand that the solicitor’s instructions have increased the claimant’s expenses, but the maximum scale for a hearing (£1,500) is for a full day’s hearing on the merits; it was a CMC of about 40 minutes. I award costs to the plaintiff as follows:

Application preparation: £400
Filing fee: £400
Audience: £400

Total: £1,200

22. I order CLOSE BROS INVOICE FINANCE LIMITED, Mr David Lawrence Fabb and Mr Greg Taft (jointly) to pay Close Invoice Finance Limited the sum of £1,200 within 21 days of the expiry of the appeal, or within 21 days of the final decision of this case if any appeal against this decision is unsuccessful. According to art. 74(1) of the Act, an appeal can only be taken from the decision to grant the application; there is no right of appeal with respect to fees.

23. Any notice of appeal against this decision must be given within one month of the date of this decision. The appeal is to the High Court in England, Wales and Northern Ireland and to the Court of Session in Scotland.

24. The Company Names Adjudicator must be notified of any appeal, so that enforcement of the order can be stayed.

As of May 13, 2022

Heather Harrison
Arbitrator of Company Names

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