Essex County Council v UBB Waste (Essex) Ltd

JurisdictionEngland & Wales
JudgeMr Justice Pepperall
Judgment Date18 June 2020
Neutral Citation[2020] EWHC 1581 (TCC)
CourtQueen's Bench Division (Technology and Construction Court)
Docket NumberCase No: HT-2017-000110
Date18 June 2020

[2020] EWHC 1581 (TCC)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

TECHNOLOGY AND CONSTRUCTION COURT (QBD)

Rolls Building

Fetter Lane, London EC4A 1NL

Before:

THE HONOURABLE Mr Justice Pepperall

Case No: HT-2017-000110

Between:
Essex County Council
Claimant
and
UBB Waste (Essex) Limited
Defendant

Marcus Taverner QC, Piers Stansfield QC, Paul Buckingham and Daniel Churcher (instructed by Slaughter and May) for the Claimant

Roger Stewart QC, Martin Kingston QC, David Turner QC, Celina Colquhoun and George McDonald (instructed by Norton Rose Fulbright LLP) for the Defendant

Judgment No. 2

Site view: 1 May 2019

Hearing dates: 2, 3, 7, 8, 9, 10, 13, 14, 15, 16, 20, 21, 22, 23, 29 & 30 May, 4, 5, 6, 10, 12 & 13 June and 2, 3 & 4 October 2019

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Pepperall THE HONOURABLE

Paragraph

INTRODUCTION

1

THE FACTUAL EVIDENCE

6

THE PROPER APPROACH TO THE EVIDENCE

6

THE AUTHORITY'S WITNESSES

10

UBB'S WITNESSES

20

THE EXPERT EVIDENCE

35

INDEPENDENCE, IMPARTIALITY & OBJECTIVITY

36

THE AUTHORITY'S TECHNICAL EXPERTS

41

DR JOHN WEATHERBY

45

THE OTHER EXPERTS

58

THE PROCUREMENT OF THE FACILITY

61

THE AUTHORITY'S WASTE STRATEGY

61

THE PROCUREMENT PROCESS

72

UBB'S DESIGN

21

THE CONTRACT

83

THE PRINCIPAL OBLIGATIONS

83

APPROACH TO CONTRACTUAL CONSTRUCTION

87

IMPLIED TERMS: GENERALLY

89

IMPLIED TERMS CONSTRAINING THE EXERCISE OF A CONTRACTUAL DISCRETION

96

IMPLIED TERMS OF GOOD FAITH AND CO-OPERATION

30

THE ACCEPTANCE TESTS

118

TEST 1: THROUGHPUT

119

TEST 2: RECOVERY

121

TEST 3: BMW REDUCTION

125

TEST 4: RECYCLATES

133

TEST 5: SRF QUALITY

137

TESTING IN BIO-STABILISATION MODE

42

THE DENSITY PROBLEM

158

THE DESIGN DENSITY

48

THE DISCOVERY OF THE DENSITY ISSUE

50

CAN THE ORIGINAL FACILITY PASS THE ACCEPTANCE TESTS?

169

TEST 1: THROUGHPUT

169

TEST 2: RECOVERY

51

TEST 3: BMW REDUCTION

51

TEST 4: RECYCLATE

200

TEST 5: SRF QUALITY

205

COMPOST-LIKE OUTPUTS

206

THE QSRF LINE

212

THE DEVELOPMENT OF THE QSRF PLAN

212

THE APPROVED MODIFICATIONS

228

THE WALKING FLOOR AND TRAILER-LOADING SYSTEM

69

UBB'S ENTITLEMENT TO OPERATE THE APPROVED MODIFICATIONS

243

UBB'S ENTITLEMENT TO INSTALL THE WALKING FLOOR AND TRAILER-LOADING SYSTEM

265

THE MODIFIED METHOD STATEMENTS

273

CONCLUSIONS

279

BUYING DOWN THE ACCEPTANCE TESTS

280

CAN THE MODIFIED FACILITY PASS THE ACCEPTANCE TESTS?

296

TEST 1: THROUGHPUT

297

TEST 2: RECOVERY

85

TEST 3: BMW REDUCTION

85

TEST 4: RECYCLATES

307

TEST 5: SRF QUALITY

308

THE QUASI-ACCEPTANCE TESTS

309

COMPOSITION ISSUES

86

UBB'S DESIGN ASSUMPTIONS

310

THE COMPOSITION BANDS

318

THE FALL IN BMW PUTRESCIBLE WASTE

324

THE COMPOSITION DATA & ROLLING ANNUAL AVERAGE

328

CHALLENGING THE COMPOSITION TESTS

335

UBB'S CHALLENGE TO THE 2015 TEST RESULTS

344

THE AUTHORITY'S CHALLENGE TO THE 2016 TEST RESULTS

354

CONCLUSIONS

355

OPTIONS REVIEW

100

THE IMPACT & REMEDY REPORTS

357

THE OPTIONS REVIEW

361

A COMPENSATION EVENT

364

THE DIVERSION OF WASTE DUE TO THE 2017 ASBESTOS SCARE

365

THE ISSUE

365

THE CONTRACTUAL POSITION

370

ANALYSIS

373

CLAIMS FOR DECLARATORY RELIEF

384

THE AUTHORITY'S CLAIMS FOR DECLARATORY RELIEF

388

DECLARATIONS 1-5

391

DECLARATION 6: THE RIGHT TO TERMINATE

393

UBB'S CLAIMS FOR DECLARATORY RELIEF

424

DECLARATIONS AS TO THE QSRF LINE

425

DECLARATIONS IN RESPECT OF COMPOSITION ISSUES

427

DECLARATION IN RESPECT OF THE INTERRUPTION IN DELIVERIES

430

FINANCIAL & OTHER CLAIMS

432

THE AUTHORITY'S CLAIM FOR DAMAGES

432

UBB'S COMPOSITION CLAIM

444

UBB'S ASBESTOS CLAIM

447

CONCLUSIONS

1252

INTRODUCTION

1

On 31 May 2012, Essex County Council entered into a 25-year contract with UBB Waste (Essex) Limited for the design, construction, financing, commissioning, operation and maintenance of a mechanical biological waste treatment (“MBT”) plant in Basildon to process the county's household waste. The facility was built and on 25 November 2014 it was certified as having passed the Readiness Tests. The facility then entered the Commissioning Period and was required to pass the Acceptance Tests before the extended Planned Services Commencement Date of 12 July 2015. It is common ground that the facility has not passed the Acceptance Tests either by such date or by the Acceptance Longstop Date of 12 January 2017.

2

The Authority argues that UBB failed to design and construct the facility so that it was capable of passing the Acceptance Tests. It contends that UBB's failure either to pass the Acceptance Tests or to attempt to do so by the Acceptance Longstop Date was an event of Contractor Default and seeks, among other relief, damages and a declaration that it is entitled to terminate the contract pursuant to clause 67.

3

UBB, which is a joint venture company incorporated by Urbaser Limited and Balfour Beatty Investments Limited, denies any default. It argues that, upon the true construction of the agreement, the facility is capable of passing the Acceptance Tests and that Essex was wrong not to recognise the Quasi-Acceptance Tests as evidence of the same. Further, UBB contends that the performance of the facility was critically dependent on the composition of the waste. It argues that the facility would have passed the Acceptance Tests and would now be in the Services Period but for the Authority's failures:

3.1 first, to provide waste with the assumed composition provided to UBB when bidding for the contract;

3.2 secondly, to approve the use of modifications made to the plant referred to compendiously by the parties as the Quick SRF or (“QSRF”) Line; and

3.3 thirdly, to engage properly with UBB in the Options Review process to deal with the composition issues by agreeing necessary modifications to the Acceptance Tests.

In addition, UBB argues that it is entitled to an extension of time for passing such modified Acceptance Tests.

4

Accordingly, UBB denies that Essex is entitled to terminate the contract. It argues that the Authority is itself in breach of contract and seeks damages in excess of £77 million as well as declaratory and injunctive relief. This is, UBB submits, “termination for convenience dressed up as termination for contractor default.” Finally, UBB also claims compensation in respect of the temporary cessation of deliveries in February 2017 following the discovery of suspected asbestos-containing materials at the facility.

5

While the principal issues can be shortly stated, the arguments are complex and the documents voluminous. I heard this case over 25 days during which ten lay witnesses and six experts gave oral evidence. In addition, I am asked to consider reports from a further two experts. I have been provided with 1,775 pages of argument and 121 authorities spanning a further 5,100 pages, and I heard counsel between their opening and closing submissions over six days.

THE FACTUAL EVIDENCE

THE PROPER APPROACH TO THE EVIDENCE

6

This is a document-heavy dispute in which the best evidence comes not from the lay witnesses or their carefully crafted witness statements, but from the contemporaneous documents. In a well-known passage in Armagas Ltd v. Mundogas SA (The Ocean Frost) [1985] 1 Lloyd's Rep 1, Robert Goff LJ (as he then was), said that it was necessary to approach the assessment of factual witnesses “by reference to the objective facts proved independently of their testimony, in particular, by reference to the documents in the case, and also pay[ing] particular regard to their motives and to the overall probabilities.”

7

In Gestmin SGPS SA v. Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), Leggatt J (as he then was) made some perceptive observations as to the fallibility of human memory, conventional misconceptions as to its reliability (at [16]–[18]) and the honest distortion of memory through the litigation process (at [19]). I agree with the judge's conclusion, at [22]:

“… the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

8

UBB's disclosure includes a number of internal documents in which UBB personnel exchanged unguarded comments. Such documents are sometimes illuminating. In assessing such evidence I do, however, keep in mind that it may well be that the Authority was, at least on certain issues, more astute to avoid recording matters in writing. Certainly, in April and May 2016 there were occasions when,...

To continue reading

Request your trial
4 cases
  • Pakistan International Airline Corporation v Times Travel (UK) Ltd
    • United Kingdom
    • Supreme Court
    • 1 January 2021
    ...in argument:Adam Opel GmbH v Mitras Automotive (UK) Ltd [2007] EWHC 3481 (QB)Essex County Council v UBB Waste (Essex) Ltd (No 2) [2020] EWHC 1581 (TCC); 191 Con LR 77Law Debenture Trust Corpn plc v Ukraine [2018] EWCA Civ 2026; [2019] QB 1121; [2019] 2 WLR 655, CAMSC Mediterranean Shipping ......
  • Essex County Council v UBB Waste (Essex) Ltd
    • United Kingdom
    • Queen's Bench Division (Technology and Construction Court)
    • 11 September 2020
    ...2019 trial between the parties. 2 By my principal judgment in this litigation, Essex County Council v. UBB Waste (Essex) Ltd (No. 2) [2020] EWHC 1581 (TCC), I granted declarations that: 2.1 UBB had failed, in breach of contract, to achieve Service Commencement by the Acceptance Longstop Da......
  • Portobello Productions Ltd v Sunnymarch Ltd
    • United Kingdom
    • Chancery Division
    • 7 November 2022
    ...held not to be the subject of a Socimer clause, and declined to find it was subject to an implied term. 72 Lastly, in Essex County Council v UBB Waste Essex Limited [2020] EWHC 1581 (TCC) Pepperall J at [97] stated that there is no scope for implying a Socimer term where a contract gives o......
  • James Waste Management LLP v Essex County Council
    • United Kingdom
    • Queen's Bench Division (Technology and Construction Court)
    • 19 May 2023
    ...the subject of a claim brought by the Council against UBB. In a judgment dated 18 June 2020, Pepperall J upheld that claim (see [2020] EWHC 1581 (TCC)). He declared that the Council had been entitled to terminate the UBB Agreement as at 13 June 2019 because the MBT could not pass the relev......
3 firm's commentaries
  • Complex Commercial Litigation Law Review – England and Wales
    • United Kingdom
    • JD Supra United Kingdom
    • 27 January 2021
    ...3) [2019] EWHC 606 (QB), Cathay Pacific Airways Ltd v. Lufthansa [2020] EWHC 1789 and Essex County Council v. UBB Waste (Essex) Ltd [2020] EWHC 1581 (TCC)).64 It is also possible to agree remedies for breach of contract as well, including by way of deposit mechanisms, actions for agreed sum......
  • Complex Commercial Litigation Law Review - Fifth Edition - England & Wales
    • United Kingdom
    • JD Supra United Kingdom
    • 19 December 2022
    ...3) [2019] EWHC 606 (QB), Cathay Pacic Airways Ltd v. Lufthansa [2020] EWHC 1789 and Essex County Council v. UBB Waste (Essex) Ltd [2020] EWHC 1581 (TCC).68 It is also possible to agree remedies for breach of contract, including by way of deposit mechanisms, actions for agreed sums and liqu......
  • The Risks Of Claims Against Solicitors Regarding Expert Evidence
    • Ireland
    • Mondaq Ireland
    • 4 August 2020
    ...claims if there are subsequently problems with that expert evidence. Footnotes 1 Essex County Council v UBB Waste (Essex) Limited (2020) EWHC 1581 (TCC) 2 De Sena & Anor v Notaro & Ors [2020] EWHC 1031 (Ch) 3 A Company v X, Y and Z (2020) EWHC 809 (TCC) Originally published 03 August, 2020 ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT