Patersons Of Greenoakhill Limited Against Glasgow City Council
| Jurisdiction | Scotland |
| Judge | Lord Clark |
| Neutral Citation | [2020] CSOH 43 |
| Date | 14 May 2020 |
| Docket Number | CA82/19 |
| Court | Court of Session |
| Published date | 14 May 2020 |
OUTER HOUSE, COURT OF SESSION
[2020] CSOH 43
CA82/19
OPINION OF LORD CLARK
in the cause
PATERSONS OF GREENOAKHILL LIMITED
Pursuer
against
GLASGOW CITY COUNCIL
Defender
Pursuer: Richardson QC, Young; Pinsent Masons LLP
Defender: Dunlop QC, Byrne; Morton Fraser LLP
14 May 2020
Introduction
[1] The pursuer and the defender were parties to a contract in terms of which the
pursuer carried out processing of waste material collected by the defender. Disputes arose
between the parties and in due course the defender gave notice of termination of the
contract. The pursuer claims that the defender committed a material and repudiatory
breach of the contract, by purporting to terminate it without a proper basis, as a result of
which the pursuer rescinded the contract. The pursuer seeks declarator that its rescission of
the contract was valid. The pursuer also seeks the award of various heads of damages for
alleged breaches of contract by the defender, as well as a claim for recompense. The
defender contends that it validly terminated the contract, as a result of material breach of
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contract on the part of the pursuer. In its counterclaim, the defender seeks damages from
the pursuer for breach of contract. Each party took issue with the relevancy of the other
party’s pleadings and the case called for a debate on those matters.
Background
[2] The pursuer’s business activities include the treatment of waste collected by local
authorities. The local government sector in Scotland carries out public procurement through
the organisation Scotland Excel. There was a framework agreement between Scotland Excel
and various service providers (including the pursuer) through which local authorities could
procure services. One means of doing so was by a competitive bid procedure (known as a
mini-competition) amongst the service providers. In early 2015, a mini-competition took
place under the framework agreement for the award of a contract by the defender relating to
the reception, collection and treatment of “bulky waste”. An invitation to tender (“the ITT”)
was issued. The ITT formed part of a wider exercise being run by the defender for the
award of numerous contracts concerning the collection and treatment of various forms of
waste. The contracts which formed part of this exercise were split into twenty-three lots.
The mini-competition in relation to bulky waste was in respect of Lot 2.
[3] The ITT required the pursuer to take a trial load of bulky waste from the defender.
On 20 March 2015, the pursuer did so and it also made a detailed assessment of the
composition and quality of the trial load. The pursuer recorded that it had been able to
recycle 75.43% of the trial load. The pursuer participated in the mini-competition and was
awarded the contract for Lot 2 by the defender on or around 9 June 2015. On or around
21 August 2015, the pursuer signed and returned a copy of the defender’s letter of award to
signify its acceptance. The contract was governed by the terms and conditions contained
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within: (a) the ITT; (b) the pursuer’s tender; (c) the General Terms and Conditions and
Standard Terms of Appointment (“the general terms”); and (d) the Special Terms and
Conditions and Schedule of Requirements (“the special conditions”). The key terms of the
contract are set out below. One of the central aims of the contract was to maximise recycling
or re-use of material and to achieve a target of recycling 60% of the waste.
[4] Disputes arose between the pursuer and the defender about the pursuer’s treatment
of the waste. The pursuer’s position was that the waste delivered by the defender materially
deviated from the composition and quality of bulky waste and that significant amounts
were not bulky waste. In or around April 2016, the pursuer suspended performance of the
contract. Between April and August 2016, the parties entered into discussions about the
composition and quality of the waste. Among other things, the defender arranged for the
pursuer to take some further trial loads of bulky waste that the defender intended to deliver
for processing in the future. The pursuer recommenced the acceptance of waste in early
August 2016, while the dispute was continuing. The parties continued to correspond about
the matter. The defender maintained that it was delivering bulky waste in conformity with
the contract and that such waste was reasonably capable of achieving the minimum
recycling target of 60% required under the contract. Eventually, in or around November
2016, the parties agreed to a joint instruction of waste analysts Albion Environmental
Limited (“Albion”). Both parties agreed to be bound by the results and the contractual
consequences of Albion’s compositional analysis.
[5] On 6 July 2017, the defender alleged that the pursuer was in material breach of the
contract. Between 6 July and 19 September 2017, the parties continued to correspond about
the dispute. By letter dated 19 September 2017, the defender gave notice (in terms of
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