Case Nos: CA-2024-002136 - [2025] EWCA Civ 921

Conclusions

I agree with the Council that, contrary to the Judge’s view, FCCB is not entitled to make deductions in respect of the haulage costs at issue.

My reasons are as follows:

Proviso (c) is expressed in general terms. It simply bars deductions in respect of “costs of handling or processing the Third Party Waste … by the Contractor or Affiliate”. Nothing is said to limit the proviso to costs of handling or processing at a Facility. On the ordinary meaning of the words, therefore, the provision is not subject to the qualification for which FCCB contends;

As the Judge recognised, his approach “produces an anomaly, in the sense that it may be argued that [Third Party Waste] has a different meaning in different parts of the same clause [i.e. the definition of ‘Third Party Income’]”. O’Farrell J said in paragraph 85 of her unappealed judgment of 26 October 2021:

“The definition [of ‘Third Party Income’] could have stated that it was limited to income generated from the time at which waste arrived at the Facilities, or income generated directly by the treatment and disposal processes at the Facilities provided by FCCB to the [Council]; it does not do so. The natural and ordinary meaning of income ‘derived from Third Party Waste’ is that it extends to all income arising from waste that is ultimately received at the Facilities, regardless of the point in time at which the sums from which the income is derived become payable.”

Proviso (c)’s reference to “the costs of handling or processing the Third Party Waste” might similarly have been expected to extend to all costs of handling or processing waste from third parties that is ultimately received at Greatmoor, regardless of the point in time at which the handling or processing takes place; and

The fact that the costs of transporting waste from High Heavens WTS to Greatmoor have already been factored into the calculation of the Unitary Charge payable to FCCB means that the Council’s construction of provision (c) does not give rise to unfairness in the way that the Judge perceived.

In my view, therefore, ground 3 of the Council’s grounds of appeal succeeds. It seems to me that the deductions in respect of haulage costs are barred by proviso (c).