Don’t Confuse Companies With Their Trading Style! High Court Ruling

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Companies are often far less well known than the brands under which they trade. A recent High Court case reviewed by litigation expert David Watson illustrated that failing to make a distinction between formal corporate entities and their trading style can cause problems when it comes to dispute resolution.

The case concerned a scaffolding business that contracted to provide its services to a property company. Much of the pre-contract correspondence was conducted by the company under the heading of its trading style. However, the final purchase order was in the company’s name and the scaffolder was instructed to submit its invoices to the company.

After a dispute arose in respect of sums due under the contract, the matter was referred to an adjudicator by the scaffolder – who made the mistake of addressing the notice of adjudication not to the company but to its trading name. The company’s argument that that amounted to a fundamental flaw in the proceedings was rejected by the adjudicator, who awarded the scaffolder £57,473 plus VAT.

After the scaffolder launched proceedings to enforce this, the company pointed out that its trading style had no legal substance and  was shared by a multitude of other companies that trade from the same address. The notice having been misaddressed, it failed to identify the correct contracting party and the adjudicator thus had no jurisdiction to consider the matter.

In rejecting those arguments, however, the Court noted that a misdescription of a party in a notice of adjudication does not of itself render the notice invalid. The only confusion was on the scaffolder’s part and the company was at all times aware both that it was a party to the contract and that it was the intended respondent to the adjudication.

The notice named the specific property and project concerned in the contract and, taken in context, there was no room for doubt that, of all those to whom the trading name might have referred, it was the company against which the notice was targeted. There being no real ambiguity or lack of clarity in the notice, it was sufficient to effectively commence a valid adjudication. The Court entered summary judgment against the company in the full amount of the adjudicator’s award.

Says David “Issuing a claim against the wrong legal entity or trading style is an easy and sometimes expensive mistake to make. Using Watson Ramsbottom to guide you through the process will ensure all matters are dealt with properly at each stage of the proceedings and prevent an unnecessary legal argument over a procedural flaw in the claim”.

If you would like expert advice please contact David on 01254 30 10 44, or complete our online enquiry form and one of our experts will contact you.

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