High Court finds for Defendants in £35 million solar farm dispute

14/04/21

Mr Justice Henshaw has today handed down judgment in Toucan Energy Holdings Ltd v Wirsol Energy Ltd, a long running dispute involving the construction of 18 industrial scale solar parks. The Judgment follows a five week trial in October-November 2020, which (exceptionally in light of the Coronavirus pandemic) took place in person in the Rolls Building.

Toucan alleged that Wirsol had failed properly to construct the solar parks, such that they were defective and at risk of catastrophic failure. It claimed c.£30 million of losses. Wirsol contended that (save in minor respects) the solar parks were properly built and that Toucan’s losses were minimal.

Wirsol further counterclaimed for payment of c.£6.5m under an outstanding invoice. Toucan alleged that no payment was due on numerous grounds, including that it had not waived a condition precedent to payment.

The Judgment dismissed the vast majority of Toucan’s £30 million claim, finding that only a fraction of the losses were made out. Claims for alleged ongoing ‘blight’ and consequential losses arising from the refinancing of Toucan’s debts were dismissed in their entirety, and the Judgment contains a valuable analysis of the circumstances in which losses of this type can be claimed in a construction dispute.

The Judge upheld Wirsol’s counterclaim on almost all issues, finding that c.£6.25m was due on the unpaid invoice. The Judgment contains a detailed discussion of the circumstances in which a waiver can be given under a commercial contract. The Judge ultimately concluded that Toucan was obliged to give a waiver under the contract in certain circumstances, and that it had done so. In any event, Toucan’s conduct was such that (if required) it would have been found to have given an equitable waiver.   

The case also attracted national press attention after it emerged that Toucan had raised very substantial sums from a local authority to refinance its investments (e.g. https://www.thetimes.co.uk/article/supercar-fan-liam-kavanagh-earns-5m-in-solar-deal-with-thurrock-council-ctdjgksxk). The Judge found that the prospectus prepared for this refinancing contained “clear untruths”.

Though a consequentials hearing is awaited, Wirsol stands to make a very substantial net recovery.

The Judgment is here.