Pine Energy Consultants Ltd V. Talisman Energy (uk) Limited
| Jurisdiction | Scotland |
| Judge | Lord Glennie |
| Neutral Citation | [2008] CSOH 10 |
| Date | 18 January 2008 |
| Docket Number | CA93/06 |
| Court | Court of Session |
| Published date | 18 January 2008 |
| OUTER HOUSE, COURT OF SESSION [2008] CSOH 10 | |
| CA93/06 | OPINION OF LORD GLENNIE in the cause PINE ENERGY CONSULTANTS LIMITED Pursuers; against TALISMAN ENERGY (UK) LIMITED Defenders: ________________ |
Pursuers: Peoples, Q.C.; Brechin Tindal Oatts
Defenders: Clark, Q.C.; Shepherd & Wedderburn, W.S.
18 January 2008
Introduction
[1] In this action, in which I heard a debate at the instance of the defenders, the pursuers conclude for the following relief:
"1. For declarator that the pursuers and defenders were in partnership with the objective of (i) developing and operating an industrial scale over the horizon deep water offshore wind farm in the Moray Firth estuary (ii) creating value through the extension of the life of the Beatrice oil field platforms and deferment of the defenders' associated abandonment costs (iii) generating and supplying electricity from wind power, all with a view to profit ('The Beatrice Wind Farm Project').
2. For count and reckoning by the defenders with the pursuers for the whole profits of the Beatrice Wind Farm Project made by the defenders from 21 December 2001 to the date of citation from the use of the pursuers' intellectual assets set out in the Confidentiality Agreement between the parties dated 2 May 2001 and for payment by the defenders to the pursuers of the balance found to be due.
3. Failing an accounting, for payment by the defenders to the pursuers of an overriding royalty of 2% of all gross revenues from the Beatrice Wind Farm Project, reserving to the pursuers the right to bring claims relative to the Beatrice Wind Farm Project arising subsequent to this action and subsisting for the lifetime of the Beatrice Wind Farm Project.
4. Alternatively (a) to find and declare that the defenders have been unjustly enriched and (b) for payment by the defenders to the pursuer (sic)of the sum of TWENTY FIVE MILLION POUNDS (£25,000,000) STERLING with interest thereon at the rate of eight per cent per year from the date of citation to follow hereon until payment."
There is also a Conclusion for expenses.
The pursuers' averments in the Summons
[2] The pursuers' averments cover some fourteen closely typed pages. In order to deal with the attack made upon the pleaded case, it is necessary to summarise them in some detail. In Article 2 of Condescendence the pursuers explain that in about 1997 they began to investigate whether an economic case could be made out for the generation of electricity by means of large scale wind farms situated over the horizon (more than 12 miles from land) in water depths of up to 50 metres. They go on to narrate (in Article 3) that that during 1999 and 2000 they undertook a feasibility study which demonstrated that such wind farms could be economic if deployed using cost-effective methods and designs; that they pursued engineering solutions; that, having assessed the prevailing conditions in the Moray Firth, they identified that as their initial preferred location for such a development; and that they considered the possibility and financial benefits of developing such a wind farm utilising the defenders' existing oil and gas offshore installations in the Beatrice Field in the Moray Firth. This had potential attractions, they say, since oil production platforms owned and operated by the defenders in the Beatrice Field were nearing the end of their useful life and the defenders were facing the prospect of very substantial decommissioning costs. Having concluded that such a large scale wind farm in that location was a viable proposition, they decided to approach the defenders. They explain that the defenders were known to be a company with the financial resources to convert the idea into a reality. The pursuers aver that before approaching the defenders, they had devoted a considerable amount of time, effort and money in carrying out their investigations.
[3] In Article 4 of Condescendence the pursuers aver that, in August 2000, they approached the defenders with a written proposal which was the culmination of the work carried out by them between 1997 and 2000. The proposal, together with the matters upon which the pursuers rely in seeking to ascribe to it the characteristic of confidentiality justifying legal protection, is described in the following passage:
"The proposal was for a joint venture between the pursuers and the defenders to develop a large scale offshore wind farm beyond the horizon (from onshore) in water depths of between 40 and 50 metres in proximity to the Beatrice Oil Field in the Moray Firth capable of generating around 700 megawatts of electricity utilizing wind turbines each capable of generating 5 megawatts of electricity. As at August 2000, siting wind turbines in such depths in hostile environments was unheard of and existing commercial wind turbines were generating only around 1 to 2 megawatts of electricity. The pursuers' proposal involved the conversion of existing oil and gas offshore installations in the Beatrice Field, which were then nearing the end of their useful life, into part of the infrastructure of the wind farm with consequent substantial savings, running into many millions of pounds, in relation to the decommissioning of such installations. Prior to approaching the defenders, the pursuers had thoroughly assessed the proposed development and had concluded that it was both economically and technically viable. The pursuers as part of that assessment had identified the Beatrice Field as an appropriate location for a development of the kind proposed. The information upon which all of these conclusions were based was disclosed in confidence to the defenders. The pursuers, as part of the disclosure of information about the proposal, supplied the defenders with economic and financial models as well as illustrative design sketches and drawings. ... The proposal, including the information relating to it, was not in the public domain. Information about the proposal, including financial models and sketches and drawings relating to it, and the proposal itself were confidential information."
This proposal, submitted in August 2000 was variously referred to in argument as "the proposal" or "the concept".
[4] Although the defenders, in a root and branch attack on the pursuers' pleadings, made submissions as to the relevancy and specification of the concept thus described, the full force of their criticism was directed towards the passages that followed this description of the proposal which extend over several pages. In summary, what the pursuers say in the remainder of Article 4 is that over the following period, up until at least May 2001 (and possibly for much longer), the pursuers disclosed further confidential information to the defenders. The following extracts give the flavour of what is averred. After the presentation in August 2000, the pursuers "also carried out presentations over a number of months in the course of which information about the proposed development was disclosed in confidence to the defenders." They go on to say:
"In their discussions with the defenders, the pursuers explained why they considered wind turbines producing around 5 megawatts were an achievable proposition. By reason of the work they had done prior to approaching the defenders, the pursuers had concluded that an output of about 5 megawatts for each wind turbine was required to make a large scale wind farm located in deep water an economic proposition. As part of their confidential discussions with the defenders, the pursuers also discussed the use of non-traditional manufacturing materials, such as carbon fibre, for the manufacture of the turbines. The pursuers disclosed that they had looked at the possibility of making use of materials used in the aircraft industry to construct wings and fuselages. The discussions, presentations, and disclosure of information extended over a period of many months with a view to convincing the defenders that the pursuer's (sic) proposed development project was technically feasible and economically viable."
Later in Article 4 they say this:
"As a result of the discussions, presentations and information imparted by the pursuers to the defenders in confidence, the defenders were convinced that the proposed development was viable and represented an opportunity not only for them to avoid decommissioning costs estimated at around £70 million but also to create a highly profitable large scale wind farm in the Moray Firth."
Further on in the same Article they say:
"By obtaining the benefit of the work done by the pursuers in relation to the development of a large scale wind farm in that location, the defenders avoided starting completely from scratch and were able to gain a valuable advantage over such others. The pursuers' work, including their presentations and the information imparted in confidence to the defenders, was sufficient to demonstrate to the defenders that the project had merit and should be taken forward as in fact has happened."
The pursuers aver that the defenders brought in consultants. After a detailed consideration of "the work done by the pursuers and the information imparted in confidence by the pursuers to the defenders", and aided by the services of Mr Alan Mathewson (whose services were provided by the pursuers to the defenders for this purpose under a Master Consultancy Agreement), those consultants confirmed the viability of the proposal. The consultants had been given "material provided in confidence by the pursuers including presentational material, financial models and data compiled and studies carried out by or on behalf of the pursuers in order to demonstrate the commercial viability of the proposed project." The averments continue in a similar vein. As I shall indicate, it is averred that the defenders used this confidential information for their own purposes in pursuing a similar project to that suggested by the pursuers.
[5] It is averred in Article 4,...
To continue reading
Request your trial
-
Reclaiming Motion By (first) Steven Worbey And (second) Kevin Farrell Against (first) Sharon Laughland Campbell; (second) Wapo Y Wapa Limited; And (third) Matthew Chadwick, As Trustee In Bankruptcy Of Steven Elliott
...and an element of delectus personae in the membership of the partnership); Pine Energy (Consultants) Ltd v Talisman Energy (UK) Ltd [2008] CSOH 10 (agreement as to capital contribution and percentage profit share). In Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd Lord Coulsfield conclu......
-
(first) Steven Worbey And (second) Kevin Farrell Against (first) Sharon Campell; (second) Wapo Y Wapa Limited; And (third) Matthew Chadwick, As Trustee In Bankruptcy Of Steven Elliott
...the existence of a partnership, the absence of all of them was not. Finally, in Pine Energy (Consultants) Ltd v Talisman Energy (UK) Ltd [2008] CSOH 10, Lord Glennie dismissed an action concluding for declarator that the parties were in partnership, observing that: “…on the pursuers' own av......
-
Roderick I'Anson Banks, Lindley & Banks on Partnership
...here to key dicta in Scottish partnership cases, for example, Lord Glennie in Pine Energy Consultants Ltd v Talisman Energy (UK) Ltd ([2008] CSOH 10) and Lord Coulsfield in Dollar Land Cumbernauld Ltd v CIN Properties Ltd (1996 SLT 186). Whilst the Outer House stages of Worbey v Campbell ([......