29 Jan 2015

Errant "s" sends British company bust

12:21 pm on 29 January 2015

Scrabble players know what an 's' is worth but, in their wildest dreams, it is nowhere near what one little letter could cost the British government.

Britain's Companies House, the equivalent of New Zealand's Companies Office, mistakenly recorded in 2009 that Cardiff engineering firm Taylor and Sons had been wound up. In fact, it was another company, Taylor and Son, that went under.

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Photo: 123RF

The mistake had catastrophic consequences for Taylor and Sons and the error sent the 124-year-old south Wales company which employed 250 people into administration.

Now it has just won the right in the UK High Court to pursue Companies House for £8.8 million compensation.

Taylor & Sons' owner Philip Davison-Sebry told the court Companies House had caused the collapse of his business, as customers and suppliers walked away because they thought it was being wound up.

In his judgement, Mr Justice Edis found Companies House owed a duty of care when entering a winding up order to take reasonable care to ensure that the order is not registered against the wrong company.

Mr Justice Edis ruled Taylor & Sons had proved that the reason it went into liquidation was because of an error made by Companies House. He also said the company was not consulted to enable it to challenge the mistake.

"My finding on the causation issue shows that in this case that harm amounted to the destruction of a company which had traded for over 100 years and which owned a valuable business," he said.

The information was wrongly recorded on the companies register on 20 February and was corrected three days later on 23 February.

Former co-owner Philip Davison-Sebry said that by the third day it was already too late, as it had already got around that the company was in trouble. Companies House contested the claim on the basis that it did not owe a duty of care to the company.