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

The Judgment

Having accepted in paragraph 211 of the Judgment that “the focus in this proviso is on what [Third Party Income] was modelled in the Base Case, as opposed to what costs were modelled in the Base Case”, the Judge explained that it was the Council’s case that “in relation to [Third Party Income] from [Third Party Waste] the costs have to be specifically and solely related to generating income above and beyond what is guaranteed income from that source” whereas FCCB contended that “income from [Third Party Waste] additional to gate fee revenue falls within this proviso and, hence, so do costs specifically and solely related to the generation of other sources of [Third Party Income]”: see paragraphs 213 and 214.

The Judge found FCCB’s interpretation “more compelling than [the Council’s] on this point”: paragraph 218 of the Judgment. He had said in paragraph 217:

“In my view, the phrase ‘modelled in the Base Case’ does not compel the conclusion that the only place in which the parties can look to see what is modelled in the Base Case is the Base Case itself. As long as it is clear from the [Project Agreement] as a whole that the [Third Party Income] modelled in the Base Case relates to a specific source, then that would be sufficient in my view.”

What was modelled in the Base Case was, the Judge said in paragraph 219 of the Judgment, “only the nominal [Third Party Income] in relation to gate fee revenue in respect of [Third Party Waste]”. On that basis, the Judge said that he was satisfied that “costs specifically and solely related to the generation of [Third Party Income] from sources other than this nominal gate fee revenue are in principle properly deductible from such [Third Party Income]”: paragraph 219.