3C Waste Ltd v Mersey Waste Holdings Ltd & Anor [2006] EWHC 2598 (Comm) (24 October 2006)

3C Waste Ltd v Mersey Waste Holdings Ltd & Anor [2006] EWHC 2598 (Comm) (24 October 2006)

Article 10 of the Landfill Directive and Regulation 11 of the Landfill (England and Wales) Regulations 2002 require landfill operators to charge 'full cost' for all waste disposals, including under existing contracts. The PPC Permit makes it unlawful for 3C to accept waste at less than full cost. The contract is suspended under the force majeure clause when performance at the contract price becomes unlawful. There is no implied term requiring payment of full cost, and 'full cost' does not include profit but must set off revenue from electricity generation.

Citation
[2006] EWHC 2598 (Comm)
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 Court Claim for Declaratory Relief and Related Orders / Judgment After Full Hearing
Outcome
Declarations granted in favour of 3C; contract suspended under force majeure clause pending agreement or arbitration on new price mechanism; no implied term found; guidance given on calculation of 'full cost'.
Legal Topics
Landfill Directive Compliance, Contract Frustration and Force Majeure, Implied Terms in Contracts, Direct Effect of EU Directives, Waste Management Regulation, Pricing Obligations Under Environmental Permits
Environmental Law Contract Law European Union Law Administrative Law Landfill Directive Compliance Contract Frustration and Force Majeure Implied Terms in Contracts Direct Effect of EU Directives +2 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 Court Claim for Declaratory Relief and Related Orders / Judgment After Full Hearing

Legal Issues

  1. 1 Does Article 10 of the Landfill Directive require existing landfill contracts to be performed at a price meeting 'full cost'?
  2. 2 Does the Landfill (England and Wales) Regulations 2002 and the PPC Permit require 3C to charge 'full cost' to all customers, including under pre-existing contracts?
  3. 3 Is there an implied term in the contract requiring payment of 'full cost'?

Ratio Decidendi

Article 10 of the Landfill Directive and Regulation 11 of the Landfill (England and Wales) Regulations 2002 require landfill operators to charge 'full cost' for all waste disposals, including under existing contracts. The PPC Permit makes it unlawful for 3C to accept waste at less than full cost. The contract is suspended under the force majeure clause when performance at the contract price becomes unlawful. There is no implied term requiring payment of full cost, and 'full cost' does not include profit but must set off revenue from electricity generation.

Court Disposition

Declarations granted in favour of 3C; contract suspended under force majeure clause pending agreement or arbitration on new price mechanism; no implied term found; guidance given on calculation of 'full cost'.

Orders

  • Declaration that 3C is required by the PPC Permit to charge full cost to all customers, including under the contract with Mersey Waste.
  • Declaration that the contract is suspended under the force majeure clause to the extent that performance at less than full cost is unlawful.