Director freed from claim in "Tartan Army" trade mark case

A claim of infringement by the holders of the "Tartan Army" trade mark relating to the publication of "The Famous Tartan Army Magazine" will go ahead only against the company that publishes the magazine and not the individual who owns and runs it, after a Court of Session judge ruled that there was no basis for ignoring the corporate identity.

Lord Glennie dismissed an action by The Tartan Army Ltd, which owns trade marks providing protection for branded goods for supporters of the Scottish national football team, so far as brought against Iain Emerson, sole director of Alba Football Fans Ltd, while allowing it to go ahead against Alba. The pursuer claims that the magazine and other services provided by the defender company infringe its rights in its trade marks.

The pursuer sought to make Mr Emerson personally liable, averring that he was the sole director and shareholder of Alba; there were no other employees, nor likely to be any; Alba had never filed any accounts with Companies House and its annual return was overdue; Mr Emerson was the controlling mind of Alba and had procured the commission of the wrongful act complained of; and he was "the personification of the company".

It was argued that Mr Emerson "fell squarely into the category of an individual who had made the infringing act his own". He was the only actor and in reality the magazine was his business and not that of Alba. 

Lord Glennie however held that "even on the most charitable reading of the averments made by the pursuer, its case against Mr Emerson personally is bound to fail". The court would only allow the corporate veil to be pierced "to prevent abuse of the corporate legal personality and where no other remedy is available to prevent that abuse; it will not allow the veil to be pierced to unravel situations, short of abuse, where incorporation of a company with a separate legal personality is used to cause a legal liability to be incurred by the company rather than by the individual". The relationship between Mr Emerson and Alba "is no different in principle from the relationship between individual and company to be found in every case of a one man company set up for the purpose of enabling the individual to carry on a business with the benefits of incorporation".

There were no specific averments to support procurement of commission of a wrong by Alba, and the inference that Mr Emerson took all the decisions did not advance the pursuer's case: "The 'corporate veil' would not only be pierced; it would be left in tatters", Lord Glennie commented.

Click here to view the opinion.