Halifax Plc & Ors v Halifax Repossessions Ltd & Ors [2004] EWCA Civ 331

A3/2002/2434; A3/2003/2069[2004] EWCA Civ 331
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
MR JUSTICE PATTEN
Venue Royal Courts of JusticeDate Monday, 2 February 2004
The Strand
London, WC2A 2LL
B E F O R E:
LORD JUSTICE LATHAM
LADY JUSTICE ARDEN
Between
HALIFAX PLCRespondentHALIFAX MORTGAGE SERVICES LTDRespondentHALIFAX LOANS LTDRespondentHALIFAX ASSET FINANCE LTDRespondentHALIFAX LEASING (MARCH) LTDRespondentHALIFAX LEASING (JUNE) LTDRespondent(7)HALIFAX LEASING (SEPTEMBER) LTDRespondent-v-
Between
HALIFAX REPOSSESSIONS LTDAppellantHALIFAX SECOND MORTGAGES LTDAppellantHALIFAX BUSINESS FINANCE LTDAppellantDHARAM PRAKASH GOPEEAppellant
(Computer-Aided Transcript of the Stenograph Notes ofSmith Bernal Wordwave Limited190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
The Sixth Appellant appeared in person for in personMR R HACON (instructed by DLA, Leeds LS1 4BY) appeared for Respondents
J U D G M E N TMonday, 2 February 2004

LORD JUSTICE LATHAM:

[1]I will ask Lady Justice Arden to give the first judgment.

LADY JUSTICE ARDEN:

[2]This is an appeal by Mr Gopee against the order of Patten J, dated 29 May 2002, and against an order for costs made by Lightman J dated 14 January 2003. I can summarise the background very briefly. The respondents ("Halifax") brought proceedings against Mr Gopee and three companies (which appear in the title to these proceedings as the first three defendants to the action) for trademark infringement and passing off, by reason of the inclusion in their names of the word "Halifax". Judgment was given against Mr Gopee by Blackburne J on 27 February 2002. An application was made for permission to appeal against that judgment but this was dismissed by Aldous LJ on 13 July 2002. The question then arose as to the manner in which the names of the companies could be changed in order to give effect to the findings of Blackburne J.[3]On 29 May 2002 Mr Patten J ordered that as soon as reasonably practicable the Registrar of Companies change the names of the three defendant companies in each case to names not including the word "Halifax" or any word confusingly similar to "Halifax". Patten J gave the Registrar of Companies permission to apply in relation to the order, though, as far as I am aware, the Registrar of Companies has never availed herself of that permission. Indeed she may not have known of the making of the order. Patten J also ordered that the claimant's costs of the application be summarily assessed at £3,229 and be paid by Mr Gopee to the claimants within 14 days of the date of the order. There is no transcript of the reasons given by Patten J for making the order.[4]I need not set out all the interlocutory steps. I can go straight to the order made by Lightman J on 14 January 2003. By this date it appeared that the names of the company had still not been changed, and the order which Lightman J made was that each of the defendant companies "and all of their respective subscribers" should take all necessary steps to procure that the registered names of the three companies should be changed to names not including the word "Halifax" or any word confusingly similar thereto. Lightman J went on to make an order authorising Mr Edward Chatterton, a solicitor with the respondent's solicitors, DLA, to act on behalf of each of the three companies and all of their respective subscribers to take all necessary steps to change the registered names of the three defendant companies in accordance with paragraph 1 of his order. His Lordship made an order that the costs of the application be assessed at £6,000, and ordered Mr Gopee to pay that sum to the respondents within 14 days. It is against that part of the order which Mr Gopee now appeals. Lightman J gave a very brief judgment in these terms:
"1. I order that each of the three defendants and all the subscribers shall take all necessary steps to procure that the registered names of the first three defendants shall be changed to a name not including the word 'Halifax' or any other word confusingly similar to 'Halifax'. 2. Secondly, I authorise Mr Edward Chatterton of DLA, Solicitors in the name and on behalf of each of the defendants and each of their subscribers to take all necessary steps to change the registered name of the company in accordance with that order. 3. Thirdly, I grant an injunction restraining Mr Gopee from causing or permitting any steps to be taken calculated to effect the registration of any company at the Companies Registry with a name including the word 'Halifax' or any or name confusingly similar to 'Halifax'."
No question arose on this appeal on the order of Lightman J save with respect to his order for costs as we are informed that a certificate of incorporation on change of name has been issued by the Registrar of Companies showing that the names of the three defendant companies have been changed so as to exclude the word "Halifax" or any word confusingly similar thereto. It appears that the changes of names were not effected by the members of the relevant companies but pursuant to the order of Lightman J. However, Mr Gopee has not taken any point on this.[5]On 6 June 2003 Mr Gopee made an application to this court for permission to appeal against a number of orders, including the order of Patten J of 29 May 2003. That permission was granted in relation to Patten J's order. Scott Baker LJ expressed:
"... the very gravest doubt whether the Registrar of Companies has power to comply with the order made by the court. Indeed, the claimant has apparently conceded that he did not. If there is no power to comply with the order, the order should not have been made; albeit it is easy to see why the judge made the order having been asked to do so in an apparently unopposed application by the claimant no doubt in the course of a busy list. Also, the order that he was being asked to make was doing no more than achieving what Mr Gopee had already been ordered to do by Blackburne J on 27th February. If the court had no power to make the order, it does not matter whether Mr Gopee was properly served with the application, except possibly as to whom he should apply to have it set aside."
Sir Martin Nourse went further. He said this:
"In my view an appeal against that order [the order of Patten J] is bound to succeed. I am quite satisfied that the Registrar of Companies has no power to change the name of a company in circumstances where there has been no special resolution of the company to that effect."
Those observations were of course made on an ex parte application by Mr Gopee for permission.[6]Mr Gopee and Halifax then came to an agreement to compromise the appeal against the order of Patten J, and the matter came before Chadwick LJ and myself on 29 September 2003. The court's order refers to the matter having been before Chadwick LJ and Hale LJ, but it was in fact an application heard by Chadwick LJ and myself. We decided (for reasons given in our judgments) that the appeal against the order of Patten J had to be adjourned to come on with the appeal against the costs order made by Lightman J.[7]Halifax has in those circumstances taken the very sensible course of offering to settle these appeals. Unhappily, the terms of their offer were not acceptable to Mr Gopee. I should point out that, in my judgment, Mr Gopee is not in a meritorious position. On 27 February 2002 Blackburne J ordered Mr Gopee by 28 March 2002 to take all reasonable steps, in particular through his children, Motilall Prakash Gopee and Anuradha Devi Prakash Gopee, to procure that the first, second and third defendants change their names to a name not including the word "Halifax" or any other word confusingly similar to "Halifax". Notwithstanding this order, the companies' names remained the same. It is not clear why Mr Gopee could not by taking reasonable steps have ensured that the names of the companies were changed at that stage.[8]I refer below to the evidence as to the members of the three respondent companies. The information as to their members is not, in the case of the first respondent at least, the latest available at the date of the order of Blackburne J, or those of Patten and Lightman JJ. With that qualification, however, the evidence shows that the shareholders of the respondent companies are persons connected with Mr Gopee and presumably they made no payment of their shares. However that may be, Mr Richard Hacon, who appears for Halifax, has not submitted that Mr Gopee is precluded from pursuing these appeals because he is in breach of the order of Blackburne J.[9]On this application Mr Hacon relies heavily on Order 45 Rule 8, which provides as follows:
"If an order of mandamus, a mandatory order, an injunction or a judgment or order for the specific performance on a contract is not complied with, then, without prejudice to its powers under section 39 of the Act and its powers to punish the disobedient party for contempt, the court may direct that the act required to be done may, so far as practicable, be done by the party by whom the order or judgment was obtained or some other person appointed by the court, at the cost of the disobedient party, and upon the act being done the expenses incurred may be ascertained in such manner as the court may direct and execution may issue against the disobedient party for the amount so ascertained and for costs."
[10]I now set out the provisions of the Companies Act 1985 which enable a company to change its name. Section 28(1) provides:
"(1) A company may by special resolution change its name (but subject to section 31 in the case of a company which has received a direction under subsection (2) of that section from the Secretary of State). ... (6) Where a company changes its name under this section, the registrar of companies shall (subject to section 26) enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case; and the change of name has effect from the date on which the altered certificate is issued."
As to special resolutions section 378 provides:
"(1) A resolution is an extraordinary resolution when it has been passed by a majority of not less than three-fourths of such members as (being entitled to do so) vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as an extraordinary resolution has been duly given." (2) A resolution is a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution and at a general meeting of which not less than 21 days' notice, specifying the intention to propose the resolution as a special resolution, has been duly given."
The passing of a resolution in accordance with section 378 therefore requires a meeting and a notice of meeting. Section 381A provides a statutory procedure for written resolutions in the case of private companies. In this case no meeting or notice of meeting is required. Section 381A provides:
"(1) Anything which in the case of a private company may be done (a) by resolution of a company general meeting; (b) by resolution of a meeting of any class of members of a company may be done, without a meeting and without any previous notice being required, by resolution in writing signed by or on behalf of all the members of the company with the date of the resolution would be entitled to attend and vote at such meeting."
However, whether section 378 or section 378A applies, the resolution must be passed by the members, so I need to turn to section 22 for the statutory definition of members:
"(1) The subscribers of a company's memorandum are deemed to have agreed to become members of the company, and on its registration shall be entered as such in its register of members. (2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, is a member of the company."
As to the members of the three companies, there is in evidence the annual return for Halifax Repossessions Ltd which was filed at the Companies Registry on 10 February 2000. This shows that the two subscribers, who were registration agents, transferred their two ordinary shares on 25 January 1999 to Gopee Minors Trust of 86 Hermon Hill, London E18. Accordingly, as at the date of that annual return the Gopee Minors Trust was the sole member of that company. In the case of Halifax Second Mortgages Ltd there is in evidence an extract from its annual return filed at the Companies Registry on 11 September 1999 and this shows that there were four shareholders, including the two children of Mr Gopee named in the order of Blackburne J. We are informed that the other two persons are also children of Mr Gopee. In relation to Halifax Business Finance Ltd Mr Hacon has told the court that as at 21 August 2001 there were two shareholders, namely the two children to whom I have referred. So it appears again the subscribers' shares had been transferred to other persons who thereupon became the members. Limited searches of the public files of the companies were carried out in April and may 2002. These revealed that Halifax Repossessions Ltd had filed another list of members in 2002 but that is not in evidence. It does not app4ear that there is any other information about the members of the other two respondent companies filed at the Companies Registry apart from that summarised above.[11]I should add that in the course of the history of these proceedings the two children were originally defendants, but Halifax discontinued the proceedings against them on learning that they were minors. Mr Hacon accepts that they could have been joined again as parties for the purpose of making an order against them in their capacity as members, but that step was not taken. Indeed, Mr Hacon submits that such a step was wholly unnecessary. He submits that section 28(1) of the Companies Act 1985 empowers the court to order a change of name by some other means, or at least does not prohibit the court from doing so if it chooses to exercise its powers under Order 45 Rule 8. He submits that, if that is not the true construction of 28(1), an order of the court such as Blackburne J made can easily be flouted.[12]It seems to me that the second part of that submission does not follow from the first, since it was always open to Halifax to join the members of the respondent companies and to seek mandatory orders against them that they cause the companies' names to be changed and an order empowering a person specified by the court to execute a written resolution on behalf of the members if the members failed to cause the companies' names to be changed. But that step was not taken.[13]I turn to the question of the issue of law raised by this appeal. In my judgment, Order 45 Rule 8 does not enable the court to give authority to a person to change the name of the company in a manner which does not comply with section 28 of the Companies Act 1985. A registered company, such as these three defendant companies are, is a creature of statute. A registered company can only act in accordance with the statutory scheme in the Companies Acts and likewise its members can only act in accordance with that statutory scheme. In my judgment, the court cannot vary the requirement in section 28(1) for a special resolution to effect a change of name. Moreover, if Mr Hacon's submissions were correct, there would be some very surprising results. There is no provision in Order 45 Rule 8 for the court's order to be filed at the Companies Registry, and there is no provision in the Companies Act 1985 for the Registrar to act upon an order of the court so filed. Accordingly, there would be no issue of a certificate upon incorporation on change of name. Moreover, there is no provision stating when a change of name pursuant to an order of the court would take effect. Furthermore, Mr Hacon's submission involves the proposition that there can be a change of name by a method for which no express statutory provision is made. In my judgment, for the reasons already given, that proposition cannot be correct.[14]The Companies Act 1985 attaches importance to the use by a company of the correct name, and serious consequences could flow if a company did not use its correct name following a change of name. Furthermore, a registered company must use its name as directed by the statute. Thus, section 348(1) provides that every company shall paint or affix its name on the outside of every office or place of business in a conspicuous position and in letters easily legible. Section 348(2) provides that if a company does not paint or affix its name in that way the company and every officer of it who is in default is liable to a fine. The expression "officer who is in default" is defined in section 730(2) of the Companies Act 1985 as meaning an officer who knowingly and wilfully authorises or permits the contravention in the enactment in question. However, it would not be a defence that the director was mistaken, for instance, as to the time at which in law a change of name made pursuant to a court order took effect. It would be odd for criminal liability to be imposed in these circumstances and that point lends some support to my conclusion that Mr Hacon's submission is not correct.[15]Under section 349 every company must place its name in legible characters on documents such as business letters, notices, official publications, bills of exchange, invoices, receipts and letters of credit. Officers who issue such documents on which its name is not so mentioned are liable to a fine (section 349(3)). Moreover, if an officer, for instance, signs a cheque on which the company's name is not so mentioned, he is liable to a fine and in addition, under section (4) he is further personally liable to the holder of the cheque for the amount of it unless it is duly paid by the company. Section 349 would thus impose severe consequences on an officer of the company if the name was changed by order of the court and the correct name was not used. However, the officer might be unaware of the change of name as no certificate of incorporation on change of name is required to be issued to the company, as under section 28(6) of the Companies Act 1985 when a name is changed by special resolution the imposition of liability in these circumstances would be potentially unfair and unjustified. This point too provides some support for the conclusion that I have reached.[16]Section 350 of the Companies Act 1985 deals with the engraving of the company's name on its common seal. It too renders an officer who uses a seal as the seal of the company which does not bear its correct name liable to a fine. Accordingly the same points apply to this section.[17]For all these reasons, I conclude that Order 45 Rule 8 does not empower the court to make an order which would effect a change of name of the company otherwise than by a special resolution passed in accordance with the Act, or, put another way, that to make such an order would not be effective as a means of changing the company's name, and thus would be an order which the court should not make.[18]On this basis the order made by Patten J cannot stand. Likewise, had there been an issue as to whether Lightman J's order for change of name had been a proper exercise of the powers conferred by Order 45 Rule 8, the same point would have arisen. In the proceedings before Lightman J, neither the subscribers nor the members were parties to the proceeding and the order was not made against the members in any event.[19]I now move to the further question, whether or not an order should have been made that the Registrar of Companies changed the company's name as was done by the order of Patten J. For my own part, I consider that this order was inappropriate. The Registrar of Companies is the holder of an office governed by the Companies Act 1985 and secondary legislation made thereunder. The 1985 Act defines the Registrar of Companies as: "The registrar or other officer performing under this Act the duty of registration of companies in England and Wales or in Scotland, as the case may require." (See section 744 of the Companies Act 1985).[20]The Registrar of Companies has a number of functions conferred on her by statute (see for example section 28 to which I have already referred, and Part XXIV of the Companies Act 1985), and certain delegated legislation has been made under that Part, enabling the Registrar of Companies in some cases to delegate functions to officers.[21]As I see it, the only functions of the Registrar of Companies are those which are conferred on her by statute. While it may well be that the court could in an appropriate case direct the Registrar of Companies to do something which was incidental to discharge those functions, the court, in my judgment, cannot properly direct the Registrar of Companies to do something outside the functions which are expressly conferred on her by the Companies Act 1985. It was, moreover, inappropriate to do so in the absence of argument or consent from the Registrar of Companies since, to challenge the order, the Registrar of Companies would have to have come before the court and incur the costs of doing so. It may well be that the Registrar of Companies would take the view that it was undesirable, in any event, to be involved in the change of name sought in this case, since it would involve her becoming involved in private litigation and possibly in appeals and further applications.[22]For all those reasons I do not consider that Patten J should have made the order which he made against the Registrar of Companies.[23]Mr Richard Hacon has made further submissions to the effect that the court could, as it were, collapse the process of orders envisaged by Order 45 Rule 8 and make a mandatory order and an order appointing a person to execute a document under that order at one and the same time. In support of this proposition he referred to the judgment of Hoffmann J in Ford Sellar Morris Developments Ltd v Grant Seward Ltd [1985] 29 EG 68, where Hoffmann J held obiter that it may be that in a suitable case the court would take the view that the defendant was so unlikely to do the act that in a case of urgency it would be proper to authorise the plaintiff to do it himself at once.[24]Mr Hacon also referred to the judgment of Jacob J in LuizVicente Barros Mattos Junior v MacdanielsLtd [2002] EWHC 1547 Ch, 2002 All ER (D)298, in which Jacob J was asked to make an order for the execution by a person authorised by the applicants of document to enable there to be compliance with orders for disclosure pursuant to a freezing order. Jacob J referred to section 39 of the Supreme Court Act 1981. This provides that where the High Court has given or made a judgment or order directing a person to execute a document and that person fails to comply with the order the court can on such terms as may be just order the document to be executed. Jacob J held that there could be cases where the court could go straight to a section 39 order. However, he added that it was not necessary for him to decide that point and indeed the order he made did not require a proleptic exercise of that nature. So again the observations of Jacob J were obiter.[25]In the circumstances, it is not necessary for me to decide whether the two stages envisaged by Order 45 Rule 8 can be collapsed, or whether the court, in its inherent jurisdiction, can make an order of the type envisaged by Hoffmann J. In those circumstances I leave open that question.[26]I note, however, that Patten J did not set out an antecedent order. If it is possible to make a mandatory order and an order under Order 45 Rule 8 for the execution of a document at the same time, it seems to me that it must be at least desirable that the antecedent mandatory order be set out.[27]In those circumstances, and for the reasons which I have given, I would allow the appeal against the order of Patten J of 29 May 2002. I would also allow the appeal against the costs order made by Lightman J on 14 January 2003. Such orders are accordingly set aside.

LORD JUSTICE LATHAM: I agree. (Appeal allowed; no order for costs).