Scottish Court of Session Decisions

The Registration of Business Names Act 1916 (6 and 7 Geo. V, cap. 58) enacts—“8.… Disability of Persons in Default.—(1) Where any firm or person by this Act required to furnish a statement of particulars or of any change in particulars shall have made default in so doing, then the rights of that defaulter under or arising out of any contract made or entered into by or on behalf of such defaulter in relation to the business in respect to the carrying on of which particulars were required to be furnished at any time while he is in default shall not be enforceable by action or other legal proceeding either in the business name or otherwise: Provided always as follows:—( a) The defaulter may apply to the Court for relief against the disability imposed by this section, and the Court, on being satisfied that the default was accidental, or due to inadvertence or some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may grant such relief either generally or as respects any particular contracts, on condition of the costs of the application being paid by the defaulter unless the Court otherwise orders, and on such other conditions (if any) as the Court may impose, but such relief shall not be granted except on such service and such publication of notice of the application as the Court may order, nor shall relief be given in respect of any contract if any party to the contract proves to the satisfaction of the Court that if this Act had been complied with he would not have entered into the contract; ( b) Nothing herein contained shall prejudice the rights of any other parties as against the defaulter in respect of such contract as aforesaid.; ( c) If any action or proceeding shall be commenced by any other party against the defaulter to enforce the rights of such party in respect of such contract, nothing herein contained shall preclude the defaulter from enforcing in that action or proceeding, by way of counterclaim, set off, or otherwise, such rights as he may have against that party in respect of such contract. (2) In this section the expression ‘court’ means the ‘High Court’ or a judge thereof: Provided that, without prejudice to the power of the High Court or a judge thereof to grant such relief as aforesaid, if any proceeding to enforce any contract is commenced by a defaulter in a county court, the county court may, as respects that contract, grant such relief as aforesaid.” And by section 23 of said Act it is enacted—“ Application to Scotland.—(1) In the application of this Act to Scotland ‘Court of Session’ shall be substituted for High Court; ‘Sheriff Court’

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shall be substituted for ‘County Court.’ ”

The Clydesdale Motor Transport Company, 96 Main Street, Glasgow, and Matthew Dalgleish, John M'Lean, and Janet Dalgleish or M'Lean, the only partners of the said firm, as such partners and as individuals, petitioners, presented a petition in which they craved the Court to pronounce an order granting relief to the petitioners against the disability imposed upon them by section 8 of the Registration of Business Names Act 1916 in respect of their default in registering or in timeously furnishing the statement of particulars required by the said Act.

The petition set forth—“1. That in or about the month of January 1920 the petitioners the said Matthew Dalgleish and Mr and Mrs John M'Lean formed a copartnership for the purpose of carrying on a motor transport business under the firm or style of the Clydesdale Motor Company, and have since carried on business as such.

2. That at the time the said copartnery business was formed the petitioners did not consult any law agent, and had not the benefit of skilled professional advice. None of them were aware of the existence of the Registration of Business Names Act 1916, nor of the necessity for registering and forwarding to the Registrar the statement of particulars as required by the said Act. The petitioners accordingly did not in fact register under the Act until the date after mentioned.

3. That in connection with their said business the petitioners ordered from Messrs M'Cosh & Devine, engineers, 55 and 57 Peel Street, Mile End, Glasgow, an Olson 2-ton motor-lorry.

4. That the said lorry was delivered to the petitioners on or about 30th June 1920, but was found by them to be defective and unsuited to their requirements, and was ultimately rejected by them. The petitioners thereafter raised an action against the said M'Cosh & Devine in the Sheriff Court of Lanarkshire at Glasgow, for rescission of the contract and for repetition of the price paid by them for the lorry. The said action is presently depending before Sheriff-Substitute Lyell.

5. In that action the defenders stated as a preliminary defence a plea to the effect that the petitioners not having registered under the Registration of Business Names Act 1916 were barred from insisting in the action. A record in the said action was made up and closed, and thereafter the Sheriff-Substitute pronounced an interlocutor sisting the action in order that the petitioners might proceed with an application for relief against the disability imposed on them by the 8th section of the said Act. The said interlocutor and note appended thereto are in the following terms:—

‘ Glasgow, 25 th July 1921.—Closes the record, and -having heard parties’ procurators thereon, in respect that it is admitted that this action has been raised to vindicate rights alleged to have arisen to the pursuers out of a contract made while the pursuers as a firm were carrying on business in contravention of the Act 6 and 7 Geo. V, cap. 58, sists procedure herein that the pursuers may make application for relief against the disability imposed by the 8th section of the said Act.— Will. Darling Lyell.’

‘ Note.—It is quite obvious that the pursuers may not proceed with this action until they have obtained relief from the disability imposed by the Act. The power of the County Court—which is interpreted as the Sheriff Court in Scotland—seems to be limited to granting relief only as to the contract, the subject-matter of the action (section 8 (2) proviso), and further that the action must be one for “enforcing” that contract. As at present advised, I do not think this action, which is one not for enforcing but for rescinding a contract, comes within the ambit of that sub-section. It is therefore for the pursuers to consider whether they must now apply to the Court of Session under section 8 (2). I am not much moved by the consideration of hardship where a firm has confessedly been in default since January 1920 and has carried on business in defiance of a statute passed in 1916.— W. D. L.’

6. The statement of the said plea was the first intimation which the petitioners received of the existence of the said Act and of their failure to register. They immediately took steps to supply the necessary particulars to the Registrar and have since obtained a certificate of registration, dated 22nd July 1921, which is produced herewith and referred to.…

8. In these circumstances the petitioners present this application to your Lordships for relief against the disability imposed upon them by section 8 of the said Act. They respectfully submit that their default, which they much regret, was entirely due to inadvertence and to their ignorance of the provisions of the said Act. Had they had the benefit of legal advice at the formation of the partnership they would have been informed of the provisions of the Act and would have registered them. There was no object or purpose to be served by intentional failure to register. The individual petitioners are all of Scotch nationality and are all domiciled in Scotland. As stated, on discovering their omission the petitioners at once took steps to remedy their default by complying with the provisions of the Act with regard to registration. They respectfully submit that in the circumstances the pronouncement of the order sought would be just and equitable.”

No answers having been lodged, counsel for the petitioners was heard in the Single Bills on 3rd November 1921.