Lidl Logistics Ltd & Anor v Lidl Stiftung & Co KG

The court dismissed the appellants' appeal from two decisions of the Company Names Tribunal which ordered the appellants to change the company name Lidl Logistics. The key legal questions were whether section 69 of the Companies Act 2006 operated retrospectively and whether the appellants had proved the defence in section 69(4)(e) that the respondent's interests were not adversely affected to any significant extent. The court held that section 69 does not operate retrospectively because it only provides a prospective mechanism to control future use of company names; accordingly the Tribunal was correct to apply s.69 to a company incorporated before the section came into force. On the merits, the court upheld the Tribunal's factual evaluation that the appellants had not discharged the burden under s.69(4)(e), accepting that potential future use or sale of the company name could reasonably be regarded as creating a significant adverse effect on the respondent's interests.

Background and parties: The respondent, Lidl Stiftung & Co. KG, owner and operator of the Lidl supermarket chain with substantial reputation, applied under section 69 Companies Act 2006 to object to the registered name Lidl Logistics Ltd. The appellants were the registered company Lidl Logistics Ltd and its director Mr William Hogger.

Procedural posture: The Tribunal made an interim decision (18 January 2022) refusing to strike out the respondent's s.69 application and a final decision (11 November 2022) upholding the objection and ordering a change of name. The appellants appealed to the High Court without need for permission.

Relief sought: The appellants sought to overturn the Tribunal's decisions, arguing that s.69 could not apply to a company incorporated before the section came into force and that they had established the defence in s.69(4)(e) that the respondent's interests were not adversely affected to any significant extent.

Issues framed:

• Whether section 69 has retrospective effect or otherwise applies to companies incorporated before its commencement.
• Whether, on the evidence, the appellants proved that the respondent's interests were not adversely affected to any significant extent (s.69(4)(e)).

Reasoning: On retrospectivity the court explained that s.69 operates prospectively to regulate future use of company names and does not impose retrospective liability; therefore there is no presumption against retrospectivity to displace. The court considered the authorities cited (including Lord Rodger's observations in Wilson v First County Trust) and concluded that Parliament intended s.69 to apply to existing registered names on commencement. On the s.69(4)(e) defence the court applied the principles governing appeals from specialist tribunals (as set out in Axogen and AXA Wholesale); it treated the Tribunal's multi-factorial factual evaluation with real reluctance to interfere but was satisfied the Tribunal was entitled to disbelieve or draw adverse inferences from the limited evidence. The appellants bore the onus to show no significant adverse effect; the Tribunal reasonably concluded that the potential for the company name to be used, or sold to someone who might trade in the respondent's market, could materially affect the respondent, and the appellants had not shown otherwise.

Subsidiary points: Arguments based on continuity provisions in s.1297 Companies Act 2006 and lack of transitional provisions were rejected as irrelevant or unhelpful to the appellants' position. New unpleaded defences of consent, acquiescence or estoppel were not admitted.

Appeal dismissed. The court found that section 69 Companies Act 2006 does not operate retrospectively but applies prospectively to registered company names on commencement; and the Tribunal was entitled to find that the appellants had not proved the defence in section 69(4)(e) because potential future use or sale of the name could significantly adversely affect the respondent's interests.

Appeal from decisions of the Company Names Tribunal: interim decision of 18 January 2022 (refusing strike-out) and final decision of 11 November 2022 (upholding the s.69 objection). No permission to appeal was required.