Federation Internationale De L'automobile v Gator Sports Ltd & Ors

Personal liability for a company’s tort is not established merely because the alleged accessory is its sole director or shareholder. Joint tortfeasance requires material assistance, assistance pursuant to a common design that the tort be committed, and a tort committed against the claimant. Trivial assistance is insufficient, although limited assistance may affect contribution rather than liability once it is more than de minimis. An evidential presumption may arise for a genuine one-man company, but not for every company with a sole director. The claimant retains the legal and evidential burden unless the facts justify such a presumption.

The claimant, the governing body of four-wheeled motor sport, sued three companies and an individual for infringement of its WRC-related trade marks and passing off arising from sales of merchandise after the termination of a merchandising agreement. The first and second defendants admitted liability. The issues remaining for trial were whether the third defendant was liable and whether Mr Dubov was personally liable as a joint tortfeasor.

The court considered the evidential significance of the defendants’ corporate structure and the applicable principles of accessory liability, including whether a sole-director presumption displaced the claimant’s burden of proof.

1. Liability of the third defendant. The evidence supported an inference that, during the second defendant’s creditors’ voluntary arrangement, the companies used the third defendant as a vehicle to sell stock of WRC-branded merchandise. The third defendant was therefore liable for trademark infringement and passing off.
2. Common-design liability. Applying Fish & Fish Ltd v Sea Shepherd UK [2015] AC 1229, joint tortfeasance required:
   • assistance in the commission of an act by the primary tortfeasor;
   • assistance pursuant to a common design that the act be committed; and
   • an act constituting a tort against the claimant.
   Mere facilitation was insufficient. Assistance had to be more than de minimis or trivial.
3. The court also had regard to MCA Records Inc v Charly Records Ltd [2002] FSR 26 concerning directors’ liability for torts committed by their companies.
4. Evidential burden. The claimant’s proposed reading of Grenade (UK) Ltd v Grenade Energy Ltd [2016] EWHC 877 (IPEC) was rejected. That decision concerned a genuine one-man company, consisting of a sole director and shareholder with no other individuals involved. Its evidential presumption did not apply merely because Mr Dubov was sole director, or because he was a shareholder.
5. The evidence established that Mr Dubov knew of the substantial stock, made important decisions concerning the companies, directed sales, and materially assisted the companies pursuant to a common design that the goods be sold. The sales constituted infringement and passing off. Mr Dubov was accordingly jointly liable with the corporate defendants.
6. Judgment was given for the claimant against all defendants.