3C Waste Ltd v Mersey Waste Holdings Ltd & Anor

3C Waste Ltd v Mersey Waste Holdings Ltd & Anor

The Landfill Directive and implementing Regulations require landfill operators to charge at least full cost for all waste, including under existing contracts. Where a contract price is below full cost, performance becomes unlawful upon the coming into force of the PPC Permit, and the force majeure clause suspends the contract until a lawful price is agreed or determined. There is no implied term requiring a lawful price, and profit is not included in full cost, but revenue from electricity generation must be set off.

Parties
Claimant: 3C Waste Limited; First Defendant: Mersey Waste Holdings Limited; Second Defendant: Merseyside Waste Disposal Authority
Jurisdiction
England and Wales
Judgment Date
24 October 2006
Procedural Posture
Commercial Contract Dispute / Judgment After Trial
Outcome
Declaration granted; contract suspended under force majeure clause; quantum meruit applies during suspension.
Legal Topics
Force Majeure, Implied Terms, Frustration of Contract, Implementation of EU Directives, Landfill Regulation, Waste Disposal Charges
Contract Law Environmental Law European Union Law Force Majeure Implied Terms Frustration of Contract Implementation of EU Directives Landfill Regulation +1 more

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Parties

3C Waste Limited

Claimant

Mersey Waste Holdings Limited

First Defendant

Merseyside Waste Disposal Authority

Second Defendant

Procedural Posture

Commercial Contract Dispute / Judgment After Trial

Legal Issues

  1. 1 Whether Article 10 of the Landfill Directive and Regulation 11 of the Landfill Regulations require landfill operators to charge 'full cost' for all waste, including under pre-existing contracts
  2. 2 Whether the contract between 3C and Mersey Waste is suspended or frustrated by the regulatory requirement to charge full cost
  3. 3 Whether an implied term exists in the contract requiring lawful pricing

Ratio Decidendi

The Landfill Directive and implementing Regulations require landfill operators to charge at least full cost for all waste, including under existing contracts. Where a contract price is below full cost, performance becomes unlawful upon the coming into force of the PPC Permit, and the force majeure clause suspends the contract until a lawful price is agreed or determined. There is no implied term requiring a lawful price, and profit is not included in full cost, but revenue from electricity generation must be set off.

Court Disposition

Declaration granted; contract suspended under force majeure clause; quantum meruit applies during suspension.

Orders

  • It is declared that the contract is suspended under the force majeure clause to the extent that it requires charging less than full cost.
  • 3C is entitled to charge on a quantum meruit basis during the suspension, reflecting full cost as defined by the Regulations.