Council-owned firm awarded £468,000 after contract dispute

A recycling company brought in-house by Neath Port Talbot council has been awarded more than £460,000 after a dispute with Essex-based waste company James Heys & Sons.

The ruling was handed down on Friday (26 November)

The ruling was handed down by His Honour Judge Keyser following a hearing between 11-20 October 2021 in the High Court of Justice, Business and Property Courts in Wales.

The dispute related to two contracts signed in 2017 between Neath Port Talbot (Recycling) Limited, brought in-house in 2019,  and James Heys & Sons.

The contracts required James Heys & Sons to collect and dispose of 30,000 tonnes of Refuse Derived Fuel (RDF) at a price of £78 per tonne from the “Material Recovery & Energy Centre” in Crymlyn Burrows, Swansea, which processes waste from the council.

A separate two year contract was also signed to collect and process recyclables, with a rebate paid to Neath Port Talbot (Recycling).

RDF dispute

According to the court documents, only 6,139.92 tonnes of RDF were collected, which Neath Port Talbot claimed mounts to a breach of contract, and it sued for the cost of disposing this with third parties.

James Heys & Sons denied that it was in breach of contract.

The ruling says it claimed the material wasn’t provided for it to collect and Neath Port Talbot (Recycling) Limited “instead chose to dispose of it by a third party, leaving the defendant with only the crumbs that fell from [the third party’s] table”.

James Heys & Sons counterclaimed for damages for breach of contract in the amount of the profit it says it would have made if the claimant had provided the RDF for it to remove.

Recyclables

The contract for recyclables was terminated in October 2018, just over six months early.

The claimant’s case is that it terminated that contract on account of “repudiatory breaches by the defendant, including its failure or refusal to collect certain kinds of recyclables, or to do so at the agreed prices, and its failure to pay for the cardboard it was collecting”. It claimed damages for the additional expenditure “.

The defendant denies that it was in breach of the contract and says, to the contrary, that the claimant’s purported termination of the contract was a repudiation of it.

James Heys and Sons counterclaimed for damages for breach of contract in the amount of the profit it says it would have made if the contract had continued for its proper term.

At the time, the site was operated by Neath Port Talbot (Recycling) Limited, but the company’s employees and assets were transferred to the council after the company went bust in 2019.

I am satisfied that the defendant knew that RDF was available to collect and deliberately failed to collect it

– Justice Keyser

Ruling

In his ruling, Justice Keyser said James Heys & Sons had “deliberately failed to collect it [RDF] for its own commercial reasons”.

For recyclables, he found in favour of James Heys & Sons in respect of non-ferrous metals, and awarded them £4,237.80.

Neath Port Talbot (Recycling) were awarded £103,398.05 for breach of the recycling contract, including for the non-collection of plastics and other materials.

The judge concluded: “There will be judgment for the claimant for £313,282.85 for damages for breach of the RDF contract, £103,398.05 for damages for breach of the LOTS [recyclables] contract and  £51,386.21 for debt, after netting off the debts owed by each party to the other”.

The total awarded to Neath Port Talbot (Recycling) Limited is £468,067.

Both parties have been approached for comment.

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