Partnership Whether came into existence
Partnership; Whether constituted;
Pine Energy Consultants Ltd v. Talisman Energy (UK) Ltd
Court of Session; Outer House; Lord Glennie : 18th January 2008
P approached T with a proposal for a joint project to set up and run an offshore wind farm business in the Moray Firth. There were inconclusive discussions regarding the share of P in the capital of the proposed partnership. T produced a "Partnership Prospectus" inviting others to become partners in which they referred to P as their "partner". T’s director allegedly instructed this reference. Subsequently at a presentation T told delegates that P were in addition to being their partner, part of "the offshore wind farm study team" together with T and T’s solicitors and consultants.
No agreement was reached as to the profits to be earned by T. No agreement was reached as to P’s capital contribution or share of profits despite discussions on these matters. Discussions as to T’s capital contribution were still ongoing.
15 months later the D wrote to P saying that they had decided to advance the project with other technology. P raised proceedings for among other things declarator of partnership.
T argued that on these assumed facts a partnership could not have been created. They had not begun to carry on business in common. The mere statement in the Partnership Prospectus could not create the partnership; nor was it sufficient to give rise to any inference that a partnership already existed. No agreement had been reached about P’s entitlement to profits or about T’s capital contribution. There had been no trading, firm name, partnership bank account or office premises.
Lord Glennie decided that
(1) the reference in the prospectus to P being T’s partner was insufficient to infer that a partnership had been agreed by P and T;
(2) when set against the other features mentioned by T as pointing against the partnership, especially the lack of agreement on the parties’ capital contributions and clear disagreement on P’s entitlement to profits, there were no facts on which the court could infer the existence of a partnership, and partnership claim dismissed.
Comment:
This case is a modern illustration that in deciding whether a partnership has come into existence it must weigh up the evidence of consensus on the various characteristics of partnership to see whether parties have commenced business in common with a view to profit.
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