Scottish Court of Session Decisions

Orkney Islands Council v S & JD Robertson & Company Ltd [2003] ScotCS 356 (23 May 2003)

[1] The pursuers sought leave to amend the instance of the Summons. The circumstances of the action were that on or about 23 November 1994, the pursuers sustained damage through the negligent act of an employee of the firm with whom the pursuers had a long-standing contractual relationship for the supply of oil and the maintenance of oil-fired boilers and equipment. Certain repairs had been done for the pursuers in October 1994. The action was signetted on 18 November 1999.

[2] The defenders' description and designation in the summons was S & J D Robertson & Company Ltd, a company incorporated under the Companies Act and having a place of business at Dunkirk, Shore Street, Kirkwall, Orkney, KW15 1LG. The summons was served at that address and defences were lodged in which the following appeared.

[3] The pursuers' motion sought recall of the sist and amendment to the sist. That amendment read;

"In the Defenders' designation replace the existing designation with the following:-

[4] By Certificate dated 1^st November 1994 the name S & J D Robertson Oil Limited was substituted for S & J D Robertson & Company Limited, for the Company No. SC05825.

[5] Counsel for the pursuers argued that amendment was necessary because of an error in the defenders' corporate name. There was not, he argued, a new defender or a different legal entity sought to be added, merely a correction of a minor mis-description. Accordingly the amendment, which would otherwise be time barred, did not fall foul of the dicta in Pompa's Trustees v Edinburgh Magistrates 1942 SC119 where it was said that it would not be competent after the expiry of the statutory time limit to use the Rules of Court to "substitute the right defender for the wrong defender" or "to bring in a new defender". In William David Watson v William Vincent Frame & Others Lord Mayfield on 17 June 1983, in a case reported only in 1983, 28 J L S, 421 held that altering the instance of the summons by naming the second defender as G. D. S Security Limited (formerly Guard Dog Services (Scotland) Limited) instead of "Security Guard Dog Services Limited", each entity having the same place of business, was a matter of form rather than substance.

[6] In Allan Brown Builders Limited v Glendinning, Sheriff Principal McLeod allowed an action to proceed on the basis that a firm who had been described as Drummond Brown Builders Limited instead of Drummond Brown Limited was a mis-description of something that did exist. That case is only reported in Greens Weekly Digest, 8 January 1993, No.78, but noted with apparent approval in the textbook Gore-Browne on Companies, para 2.3. where it is said (2.2.10) that a change of name does not affect the legal identity of the company. Amendment was not allowed in McCullough v Norwest Socea Ltd 1981 SLT 201 on the basis that to substitute a partnership for a company was a difference of substance. In this present case, however, the same company was in existence before and after the name change, at the same address, with the same company number.

[7] For the defenders it was argued that the statutory provisions about company names in Section 26-28 of the Companies Act 1985 indicate the critical importance and uniqueness of the company name. The name in the summons constitutes a legal non-entity and since no two companies can have the same name it is incapable of amendment. Support for that can be found in Modern Housing Ltd v Love 1998 SLT 1191 where his Lordship commenting on Richards & Wallington (Earthmoving) Ltd v Whatlings Ltd 1982 SLT 66 and distinguishing it, said that the error there was in relation to the name of the company itself. He said "That appears to me to be a completely different situation to the one involved here. In view of the unique character of any company name, an error of that character must plainly be regarded as of first importance. For all these reasons I reject the petitioners' submission that inhibition should be recalled on the ground of its invalidity". A change is accordingly a matter of substance. In Allied Irish Banks Plc v GPT Sales and Services Ltd 1995 SLT 163, it was held that diligence begun in the name of the wrong company was invalid. In Watson the Section 26 point was not canvassed and that point does not depend of the speciality of diligence. There is no identification of a legal persona and that is not a trivial error. In any event, in Watson and indeed in McCullough, it was possible to invoke the provisions of Section 19A of the Prescription and Limitation (Scotland) Act 1973. Since this is not an action for personal injury that recourse is not open.

[8] I consider that the matter is truly one of form rather than substance. The same company, which has a distinctive number, is in continuous existence despite a change of name. There is no question of convening an additional defender or substituting a different defender. The defenders' own averments would tend to indicate that and I consider the position to be entirely different from that in McCullough v Norwest Socea Ltd which, I note from Lord Maxwell's opinion at page 203, was regarded as "perhaps falling near the border line". The basis for his Lordship's decision in McCullough was that substituting a defender with joint and several liability as opposed to a limited company was a matter of substance.

[9] One can readily assent to that view.

[10] Richards & Wallington and Allied Irish Banks were cases involving diligence. Such cases require to be construed strictly. It was because in those cases the action in question was raised by a non existing party that the decision was reached Lord Osborne in Modern Housing Ltd v Love was able to allow an inhibition to persist despite part of the company's designation being wrong. He did not, in my view, despite the ruling, truly distinguish Richards & Wallington, he held that a mis-description of the company's registered office did not invalidate a diligence thought by a properly named company. I also note that in both Watson and McCullough the decision of the Court might be said to be obiter in that in each case the judge would have been prepared to allow the cases to proceed under Section 19A of the Prescription and Limitation (Scotland) Act.

[11] In the circumstances disclosed in the present case, I consider for the reasons given and following the characteristics common sense approach of Lord Mayfield in Watson, that the amendment proposed may be allowed to correct an error which I hold to be one of form rather than substance.

[12] The motion will accordingly be granted and since I indicated the view I had arrived at before writing, I find the pursuers entitled to the expenses of and occasioned by the appearance in the Motion Roll and the defenders entitled to the expenses occasioned by the amendment itself.