A 124-year old Welsh family business has won its claim for millions of pounds of damages in the High Court after it was forced into liquidation due to single spelling mistake by Companies House in recording the name of another company being wound up
The costly mistake resulted in Taylor & Sons Ltd’s suppliers believing it was in liquidation, when in fact, it was an unconnected firm, Taylor & Son, which should have been cited.
The error happened on 20 February 2009 when Companies House recorded on its register that Taylor & Sons Ltd, an engineering firm based in Cardiff, had ceased operation. But it was Taylor & Son, without the ‘s’, which was actually due to be liquidated.
The High Court heard that the details were corrected three days later, but by then the damage had been done, with Philip Davison-Sebry, former managing director and co-owner of Taylor & Sons Ltd, saying the false information about the company had already been sold on to credit reference agencies.
Davison-Sebry, who was on holiday in the Maldives with his wife at the time Companies House made the mistake, said he received a message to contact Corus, one of the firm’s major suppliers, urgently.
‘They said they weren’t happy at all I was on holiday, asking how could I be on holiday at a time like this?
‘They said we were in liquidation and that the credit agencies had told them.
‘I rang the office to find out what was going on – it was like Armageddon. This was all on the day of my wife’s 50th birthday. We will never forget it,’ Davison-Sebry said.
Davison-Sebry said that within three weeks, all of the company’s 3,000 suppliers had been in touch to terminate orders and credit facilities were withdrawn.
Attempts to reassure customers that the company could continue to operate proved fruitless and it lost its best customer in Tata Steel, which had provided it with a £400,000-a-month income, while contracts to construct three Royal National Lifeboat Institution stations never materialised, resulting in £3m of lost business.
In April 2009 Alistair Wardell and Nigel Morrison of Grant Thornton were appointed administrators to Taylor & Sons, which was the parent company of ship repair firm Taylor Marine Engineering, which had been placed into administration the previous week.
At that point, the company and its subsidiaries had a turnover of over £20m and employed a total of 250 permanent and agency staff.
At the time Wardell, director of recovery and reorganisation at Grant Thornton's Cardiff office, said: ‘Taylor Marine Engineering has recently attempted to secure further investment to secure the future of its business, however this was not forthcoming.
‘Taylor & Sons is one of Wales longest established companies with a track record of considerable success. However, the effect of the economic downturn particularly in relation to the steel industry has impacted considerably on group trading, which resulted in the appointment of administrators.’
Davison-Sebry, who was a co-owner of Taylor & Sons along with fourth-generation family members, then began a legal battle to prove that Companies House mistake was responsible for its catastrophic loss of business and ultimate collapse.
During the trial, the High Court heard evidence that the administrative slip-up was the only one of its kind ever recorded at Companies House and the judge, Mr Justice Edis, said: ‘That can only be because it was easy to avoid.’
The ruling in favour of Taylor & Sons means Companies House will be required to pay damages. The amount has yet to be finally assessed but Davison-Sebry's lawyers valued his claim at £8.8m.
A spokesman for Companies House said: ‘Companies House has recently received the judgement in this case and is currently considering the implications at this time.
‘Until these considerations are complete we remain unable to comment further.’