Lifestyle Equities CV v Ahmed

In Lifestyle Equities CV and another v Ahmed and another [2024] UKSC 17 the Supreme Court was required to consider the extent of a director’s liability for causing their company to commit a civil wrong.


The appellant, ‘Ahmed’ and his sister were directors of ‘Hornby Street Ltd’, a company which manufactured and sold clothing. The respondent, ‘Lifestyle’ held registered trademarks for ‘Beverly Hills Polo Club’ and devices which included hose-riding polo players. Lifestyle alleged that Hornby Street had infringed this trademark by selling clothing with the words ‘Santa Monica Polo Club’ on them, with images of horse-riding polo players.

So, Lifestyle claimed against Hornby Street (as well as other companies) and the Ahmeds. Lifestyle were successful – the judge found that Hornby Street had infringed the trademark and misrepresented that goods belonged to another. The court also found that the Ahmeds were jointly liable along with Hornby Street.

Hornby Street was dissolved, preventing any recovery of damages. Against the Ahmeds, Lifestyle had sought an account of the profits made from the wrong. The trial judge held that the Ahmeds did not have to account for the profits Hornby Street wrongfully made, but they did have to account for part of their salary they had personally received. The trial judge decided the Ahmeds should pay 10% of their salaries over the infringing period. This was upheld by the Court of Appeal, and both parties appealed to the Supreme Court.


  1. What is the nature and extent of accessory liability for a strict liability tort?
  2. Should a director who is found to be liable as an accessory repay the profits that company wrongly makes? Or, should the director only be liable for the sums they personally received?


The Supreme Court unanimously dismissed Lifestyle’s appeal and granted Ahmed’s appeal.

Trademark infringement is a strict liability tort. This means the court does not need to determine the state of mind of the wrongdoer. Here, the wrongdoer was Hornby Street, which had manufactured and sold the infringing clothing, and they were strictly liable. The claim against the Ahmeds was that they were accessories to this wrongdoing, by procuring Hornby Street to commit the infringing acts, or acting with a common design.

However, the court held it would be unjust to hold a person liable for procuring a wrong where they acted in good faith and without knowledge of the facts which made the other’s act wrongful. The logical reason for applying a requirement for a ‘state of mind’ is that accessory liability is not the same as primary liability and the ingredients of a claim are not the same. A person can only be jointly liable for causing another to commit a wrongful act if they have knowledge of the essential facts which makes the act wrongful. The Ahmeds did not possess this knowledge and thus were not jointly liable.

As to the claim for an account of profits, the court held the Ahmeds could not be required to pay profits earnt by Hornby Street. The court cannot order a person to pay profits earnt by another. This would amount to a penalty, or a fine, which is not the purpose of the remedy, which is to require a person to repay that which they have wrongfully received. It was wrong to order the Ahmeds to account for a proportion of their salaries – there was nothing to show that the salaries were anything other than standard remuneration. Accordingly, the salaries also could not be considered profits from wrongful actions and there was no obligation for the Ahmeds to account for them.   


Directors around the country will breathe a sigh of relief after this decision. Claimants must now prove a director’s state of mind before a finding of accessory liability can be made – in many cases, this will prove a significant hurdle. Evidence of a director’s state of mind will often be hard to come by, particularly in cases where they are closely involved with the business, such as in small or family-run companies.

Even if a claimant can jump this hurdle, the Supreme Court has limited the scope of any damages to be awarded. The remuneration received by the directors is likely to be far less than the scope of profits enjoyed by the company, which in cases of insolvency will be difficult to recover. Even then, the burden lies with a claimant to prove compensation like a salary falls outside of ordinary remuneration.