Contract with a trading name only, successfully open a court claim?

[AdeAP]

We signed a contract with a builder for significant refurbishment under their company name which subsequently seems to be a trading name but no link/minimum legal requirement to refer to real registered company name (in the name of the builder). (yes, not enough due diligence on our part!)

Weren't satisfied with work and delays (35 weeks vs 6 quoted) cost us significant additional stamp duty so we withheld that amount.

Got taken to court by the registered company not named on the contract.
Judge set it aside, as registered company not named in the contract.
Builder/claimant changed claim to his "trading name" and judge allowed the claim to proceed again.
We objected as and now going to a hearing.

The contract, website, all email, all invoices, receipts, registered offices are in the trading name only make no mention of the true registered company name/incorporated number etc.
There is no formal link between the trading name and company name.

Am I correct to assume the trading name alone is not a legal entity/able to raise a court claim?

Realise this is a contract technicality but might be the quickest/simplest resolution.
Otherwise we are happy to fight the claim for the work/delay

Thanks in advance

[atticus]

Have I got this right? Are you saying that legal action against you by the party named in the contract should not be permitted to proceed?

How does an additional SDLT charge arise?

[AdeAP]

Thanks for the response.

Yes I am asking if the case can proceed.

The party named in the contract is building company "trading name", but in the contract there is no mention of the registered company name/number, nor on any website, quotation, invoice we received.
So I am asking if that "trading name" can successfully proceed with a claim.
The builder is operating the company under a trading name and not meeting the minimum legal requirement to do so under
The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015

This was during the SDLT holiday/during covid.
We were mortgaging the property and had an 18 week window before the SDLT relief was removed.
Needed a kitchen/bathroom for the the mortgage application.
Builder quoted 6 weeks/took 35 we missed the SDLT holiday and paid more as a consequence.

[atticus]

Help me here, please. Which paragraph of those regulations do you say has not been complied with?

Did the builder know about the looming SDLT liability?

[R0b]

So I am asking if that "trading name" can successfully proceed with a claim.

The builder can sue in the name of "Mr Smith trading as Smiths Builders" but would be doing so as a sole trader, not a limited company. Just because the builder owns a limited company does not legally require him to contract with customers under that company. If the contract is silent on any mentioned of the company name, registered number and office address etc. then it would be reasonable to assume that the builder contracted as a sole trader.

You can't force a tradesperson to contract one way or another unless they agree to it. Perhaps it was an error by the builder by not including the company details on the contractual paperwork but it shouldn't nullify the contract, it just becomes a personal one for the builder with personal liability rather than liability under the company name.

It's not quite clear, however, whether that's what the builder has requested as to the change of the claimant name as I have suggested above or if the claimants name has changed to the builder's limited company trading as XX.

As an FYI, the 2015 Regs only apply if the builder was doing business and contracting in the name of the company, which may be a legal point that has to be addressed at the hearin.g

[AdeAP]

Help me here, please. Which paragraph of those regulations do you say has not been complied with?

Section 6 Paragraphs 21, 25 & 26

Did the builder know about the looming SDLT liability?

Yes advised from day 1, he made repeated estimates to finish which he failed to achieve and failed to achieve those dates we gave him

[AdeAP]

The builder can sue in the name of "Mr Smith trading as Smiths Builders" but would be doing so as a sole trader, not a limited company. Just because the builder owns a limited company does not legally require him to contract with customers under that company. If the contract is silent on any mentioned of the company name, registered number and office address etc. then it would be reasonable to assume that the builder contracted as a sole trader.

Thank you I did not consider this as a course he could take but it makes sense.
However he didn't mention the revised claim in his name, only as the company trading name

You can't force a tradesperson to contract one way or another unless they agree to it. Perhaps it was an error by the builder by not including the company details on the contractual paperwork but it shouldn't nullify the contract, it just becomes a personal one for the builder with personal liability rather than liability under the company name.

It's not quite clear, however, whether that's what the builder has requested as to the change of the claimant name as I have suggested above or if the claimants name has changed to the builder's limited company trading as XX.

As an FYI, the 2015 Regs only apply if the builder was doing business and contracting in the name of the company, which may be a legal point that has to be addressed at the hearin.g

The builder appears to making the claim in the limited company name, not as a sole trader:
Potted history
- Claim made as limited company
- My response, there is no contract with the limited company
- Judge suggests claim set aside unless the claimant can produce a valid contract
- Claimant changes the claim name to the trading name only, not "Mr Smith trading as Smiths Builders". Provides (weak IMO) documentation to say trading as limited company (letter from accountant, random Checkatrade & Federation of Master Builders websites). So I believe he is continuing the claim in his trading name as limited company (before I even raised the point about meeting legal trading as requirements)
- I respond that none of this meets the legal requirement to trade as limited company, ask to be set aside
- Judge sets a hearing date but does not say for what.

If the court allows the claim to proceed, then I am fine to do so, based on the reasons we originally withheld some money.
I will/am preparing for both routes.

However my concern is what the hearing will be about.
It is only 30 mins so I want to be completely prepared as my time will be short
If the claim can be set aside on the above/about the trading name only then I think that is cleanest/easiest solution, hence my question here.
However if we have to discuss the issue of the withheld money then that will be more protracted and I do not want to waste time talking about the contract.
Of course I can ask the judge at the beginning but just trying to do as much up front.

[R0b]

When you say it is set aside I assume you are talking about a default judgment being set aside against you, right? If not, please clarify.

Assuming it is a set aside of a default judgment, it reverts back to the defence stage unless the court agrees to adopt the defence you may have filed with the set aside application. So you will either have to file a defence or it will go to the next stage which is the directions questionnaire but you will need to see what the court order is. Just a point to note whenever you go to court, always make sure that before you leave, you confirm with the court what the actual decision and order will be, both for your own records and the recording of the hearing.

Even if the court accepts the builder's change of name for the claimant, that doesn't automatically mean that you can't challenge the position. You can still argue that the claimant, being the limited company has no legal standing to bring a claim since the contract was not agreed between you and the limited co. but between you and the builder as a sole trader. The fact that the builder has evidence he has a limited co. and is part of the federation of master builders or any other evidence does not override what the contents of the contractual document.

There could be several reasons why the builder may have not included the name of the company from a simple mistake to the fact that the builder might be winding up the company and deliberately chose not to contract under the limited co. name. Whatever the case, its not your job to investigate and in the absence of any evidence on the contract that the limited co. is the contracting entity, it would be reasonable for you to assume the builder was a sole trader. Not listing the company name on the contract is a significant omission and the court would have to decide on the evidence, which is there is nothing to suggest that he contracted under the limited co. name. The onus is on him to prove that the contract which was signed was under the limited co. name and not the builder himself. No evidence = no standing.

How much you want to push that is up to you but it is still a valid argument, though the judge might decide to substitute the name of the claim into the name of the builder as a sole trader for the purposes of this claim if the builder agrees.

Have you submitted a witness statement or anything like that? Maybe contact the court to see if the judge has made an order on the file and it's just waiting to be printed/issued, especially if the hearing date is closing in.

[atticus]

Paragraphs 21, 25 and 26 of those regulations apply to companies. Fred Smith Trading as Fred Smith Builders is not a company, but a sole trader. The regulations listed do not apply to Mr Smith.

On the SDLT point, do you have anything in writing that will help you establish that the builder knew of the need to complete within a stated timescale and the consequences for you of not doing so?

[AdeAP]

Thank you again for the time to respond Rob, I appreciate the info/guidance

When you say it is set aside I assume you are talking about a default judgment being set aside against you, right? If not, please clarify.

Sorry I realise I am not clear/exact/complete in my summary and I did not consult the paperwork writing the last response
I will try to be more exact/use plain English in a full summary again

- Online moneyclaim made by Ltd company against me
- My online response, there is no contract between me and the claimant (Ltd company) & I make my full defence about delayed work/additional SDLT liability, reason for withholding some of the final payment.
- claim assigned to local county court
- Judge makes an order for the claim to be struck off within 30 days unless the claimant can produce a valid contract between me and the claimant
- Claimant makes an application to change the claim name to the trading name only,
------- specifically not sole trader "Mr Smith trading as Smiths Builders".
------- Builder claims trading name and limited company are one and the same
------- and provides a letter from his accountant that says "Mr Smiths Ltd trading as Joe bloggs builders" Mr Smith is sole director of the company
------- and Checkatrade/FMB websites showing Ltd company info under the trading name
- Judge accepts claimant application to change name and re-instates claim and makes a court order for me 7 days to request it to be set aside.
- I respond via an application, asking for
------- an extension to the general order as we were away on holiday and missed the 7 days deadline
------- the claimants request for name change to be set aside (thereby having the claim struck off - due to no contract).
------- I also ask for the complete claim to be set aside (I now realise I should have used struck off?) due to the trading name not being associated with a registered company.
- Judge sets a hearing date specifically for "my application for extension of time" to previous court order (no mention of the original claim, my defence, application for claim name change nor my application to set the previous order/whole claim aside). Hearing is scheduled for 30 mins.

The last point is why I am unsure what will be discussed on the day in court and preparing for all avenues.
Surely not just to discuss if I should be allowed a time extension? (the original claim is now more than 18 months old)
Am guessing the focus will be on my application to discuss the claimant name/contract.

Thank you for the point about confirming the court decision before leaving, I will l do it

As you can see above the builder definitely is not claiming to be a sole trader, on the contrary apparently trying to link the trading name (as in the contract) with the Ltd company. Which I am not happy about as the Ltd company does not appear on any quote, contract, email, invoice, receipt, website, registered company address.
So the court claim is not in the Ltd company nor the builder's name but only the trading name (as per the contract).
My guess is this is his only route to make the claim stand up as that is what is in the contract, just the trading name (otherwise the Judge would have stuck the case off without a valid contract (she has effectively said that the claimant in the Ltd company name would not proceed)

Hence my headline/original question can the trading name only make a claim, is it a legal entity/is the contract and claim worthless?

Even if the court accepts the builder's change of name for the claimant, that doesn't automatically mean that you can't challenge the position. You can still argue that the claimant, being the limited company has no legal standing to bring a claim since the contract was not agreed between you and the limited co. but between you and the builder as a sole trader. The fact that the builder has evidence he has a limited co. and is part of the federation of master builders or any other evidence does not override what the contents of the contractual document.

There could be several reasons why the builder may have not included the name of the company from a simple mistake to the fact that the builder might be winding up the company and deliberately chose not to contract under the limited co. name. Whatever the case, its not your job to investigate and in the absence of any evidence on the contract that the limited co. is the contracting entity, it would be reasonable for you to assume the builder was a sole trader. Not listing the company name on the contract is a significant omission and the court would have to decide on the evidence, which is there is nothing to suggest that he contracted under the limited co. name. The onus is on him to prove that the contract which was signed was under the limited co. name and not the builder himself. No evidence = no standing.

Thanks for these points too, they really help me gel how I can approach the court case

As I mentioned if this approach with the contract will not fly then I am happy/confident to use my initial defence but trying to keep all options open/take the easiest path.

[AdeAP]

Thank you for taking time to respond.

Paragraphs 21, 25 and 26 of those regulations apply to companies. Fred Smith Trading as Fred Smith Builders is not a company, but a sole trader. The regulations listed do not apply to Mr Smith.

Yes, as I wrote the builder has tried to link the trading name to the Ltd company name but not following any of the regulations

On the SDLT point, do you have anything in writing that will help you establish that the builder knew of the need to complete within a stated timescale and the consequences for you of not doing so?

Yes absolutely, numerous emails, messages telling him to finish by x date or else we will be liable to more SDLT.

He even set his own deadlines which we accepted then failed to meet.

All of this hinged on a mortgage survey which required a functioning kitchen & bathroom to get the mortgage/complete the sale.
We had an initial mortgage survey booked (and agreed with the builder, even then it was 21 weeks into a 6 week estimated project)
Builder had even more delays (4 weeks) and as a consequence we received our mortgage offer 8 days after the SDLT deadline.

If we had stuck to the original plan we would have had something like 20 days before the SDLT holiday ended to complete the project which was ample to complete the sale

[atticus]

?

If the case has now been amended so tgat the claimant is (e.g.) Fred Smith t/a Fred Sith Builders, in what way is he trying to "link" that to the limited company?

I worry that you do not understand the distinction. Sorry if I am wrong.

[R0b]

I think I understand what you mean so I will try to answer based on what I think you are saying.

Hence my headline/original question can the trading name only make a claim, is it a legal entity/is the contract and claim worthless?

In short, the answer is no. The Civil Procedure Rules explain how a Claimant/Defendant should be addressed on the claim form and statements of case - see this link here, para 2.4(2) which explains a limited company should be labelled as "Company A trading as Smiths Builders".

That said, it's very easy for the claimant to ask the court to use its case management powers (or the court may exercises its powers to make the decision itself) to amend the name so that it is correctly titled and continue with proceedings, which I suspect may be what a sensible judge would do if there seems to be reasonable grounds for bringing the claim in the first place so don't be surprised if that happens.

I think it's probably right that you challenge the legality of the claimant's as named because simply having a trading name does not make it clear whether the trading name is a sole trader or a limited company trading as that business name, both of which could have different consequences as to liability for example.

If successful on your application and you paid an application fee and attended in person, you should argue for your costs you had to pay and attendance (if any costs incurred e.g. travel, parking, taking annual leave from work so you could attend these costs. I believe are capped at something like £90-95).

- The CPR applies to everyone whether legally qualified or litigant in person. The Claimant should have requested the correct name change from the start. No excuse that the claimant was a litigant in person, and you could rely on the Supreme Court case of Barton v Wright Hassall confirming that there is no leeway for someone who is a litigant in person and doesn't follow the rules. You can find the full case online from the Supreme Court website if you search for it.

- The general rule on costs is that the losing party pays the other's costs. You might get a curveball from the judge/claimant saying that this is a small claim so the no costs rule applies. You can counter this by saying (and I assume this since it's early stages) that (i) the claim is yet to be allocated to the small claims track and in any event (ii) CPR 27.14(2) says that the court can award a party it's application fees it has paid and any expenses incurred in attending the hearing - see 27.14(2)(c) & 27.14(2)(d). Link to this section can be found here

Best to bring these references to and documentation to the hearing on the day and offer to provide a copy to the judge when you talk about it, because if you can't prove it on the day, the judge might not grant what you want.

[AdeAP]

In short, the answer is no. The Civil Procedure Rules explain how a Claimant/Defendant should be addressed on the claim form and statements of case - see this link here, para 2.4(2) which explains a limited company should be labelled as "Company A trading as Smiths Builders".

Thank you, this is the key piece of information I was looking for

That said, it's very easy for the claimant to ask the court to use its case management powers (or the court may exercises its powers to make the decision itself) to amend the name so that it is correctly titled and continue with proceedings, which I suspect may be what a sensible judge would do if there seems to be reasonable grounds for bringing the claim in the first place so don't be surprised if that happens.

I think it's probably right that you challenge the legality of the claimant's as named because simply having a trading name does not make it clear whether the trading name is a sole trader or a limited company trading as that business name, both of which could have different consequences as to liability for example.

I agree and will challenge the legality of the claimant's name.
If the claimant or judge decides to change to the sole trader route I will challenge that further that the claimant has already pursued the Ltd company route and discredit the contract/invoices/receipts they did not follow the 2015 regulations
- the judge previously threw out the claim due to the contract not in the Ltd Company name,
- the claimant's application requested a name change to the trading name but made efforts to say it the Ltd company trading as the trading name
- the contract, invoices, etc makes no statement of the Ltd Company trading as the trading name.
If unsuccessful challenging, I appreciate the claim may proceed with the claimant as a sole trader (thank you for the pointers there) and the judge may request it but I do not feel the builder will take this approach.
However we were confident withholding payment knowing it may lead to a claim, so will then go with my original defence.

Thank you for the guidance regarding the costs, I did not appreciate I could apply for the application costs.

Finally I have said "thanks" a lot but I really do appreciate the assistance.
I'll post back here when done.

[R0b]

Good luck, just be sure to make the point about raising the costs issue at the end and don't rely on the judge. If you don't ask for costs at the hearing, it is assumed there is no order for costs.