Beware, a typo might cost you millions!

Beware, a typo might cost you millions!

The recent High Court case of Sebry v Companies House and another offers a scary insight into how a simple typo (in this case an erroneous 's') can quickly bring down a whole company.

Original news

Sebry v Companies House and another [2015] EWHC 115 (QB)

Mr Sebry, the managing director of a company called Taylor and Sons Ltd (the company) brought a claim against the Registrar of Companies (Registrar) for damages for negligence and breach of statutory duty. An employee of Companies House had erroneously registered Taylor and Sons Ltd as being in liquidation instead of Taylor and Son Ltd. As a result of the negative publicity this created, the company lost key contracts, supplier credit terms and cash advances from its bank, which quickly led to the company filing for its own administration.

What was the background to the case?

The company was incorporated in 1900 and operated as steel fabricators as part of a group of companies, with a staff of approximately 250. One of its largest customers was Corus (now Tata Steel).

On 28 January 2009 the High Court made a winding up order against Taylor and Son Ltd, a completely unrelated company. The order, which did not include the company number, was sent to Companies House for registration on 12 February 2009. On 20 February 2009 it was registered at Companies House, not against Taylor and Son Ltd, but against Taylor and Sons Ltd. The order should have been sent with a notice to Companies House form including the company number, but was not. The Official Receiver should have put the company number on the covering letter but did not.

The mistake was discovered when the Official Receiver telephoned Mr Sebry to tell him 'he' was in liquidation. Mr Sebry instructed the company's solicitor immediately, who soon sorted out the mistake with the Official Receiver who in turn contacted Companies House. It

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