Sundorne Products (Llanidloes) Limited v Geminor UK Limited

This is my extemporary judgment following the trial, over seven court days between Tuesday 11 and Wednesday 19 June 2024 (preceded by one day’s judicial pre-reading) of a Part 7 claim issued in the BPC in Manchester on 27 January 2023. The claimant is Sundorne Products (Llanidloes) Limited, which trades as ‘Potters Waste Management’. It is represented by Mr Neil Berragan (of counsel), instructed by JMW Solicitors LLP. I shall refer to the claimant as Potters. The defendant is Geminor UK Limited. It is represented by Mr Greg Plunkett (also of counsel), instructed by Joliffe & Co LLP. I shall refer to the defendant as ‘Geminor’.

The case concerns a dispute over an alleged contract for the treatment of refuse derived fuel (RDF) from domestic waste transported to Immingham from the Isle of Anglesey via a processing and baling plant in Bootle operated by a separate entity known as Gaskells (North West) Limited t/as Gaskells Waste Services (Gaskells) for onward shipment to a plant generating energy from waste (EfW) in Gothenburg in Sweden. The relevant events took place largely over the period from August 2016 to October 2017. The litigation raises issues of contract formation, repudiatory breach, and damages.

In preparing this extemporary judgment, I have borne in mind the recent guidance issued by the Senior President of Tribunals on the giving of written reasons for decisions in the First-tier Tribunal. The underlying principles would seem to me to apply to the courts as well as to the tribunals. I do not propose to identify all of the evidence relied upon in reaching my findings of fact, or to elaborate at undue length upon my conclusions on any issues of law or to express every step of my reasoning. Rather I shall refer only to the main issues in evidence in dispute and explain how those issues essential to the court's conclusion have been resolved. I shall hope to be clear, crisp and concise. However, that does not mean that I have ignored the totality of the evidence in this case.

In preparing this extemporary judgment, I have read back through the daily transcripts of the evidence and the oral submissions, and I have re-read the helpful skeleton arguments of both counsel. Since the submissions of both counsel are fully set out in their skeleton arguments, and in the case of Geminor in the defendant's counter-schedule of loss, and they are recorded in the relevant daily transcripts for Days 6 and 7, I will not burden the reader by repeating them at length in this judgment.

Before the trial, Mr Berragan had produced a revised detailed chronology, extending to some 44-pages, cross-referenced to, and incorporating extracts from, the relevant documents. Reference can be made to this chronology for a more detailed understanding of the history of this dispute, although it needs to be borne in mind that a few further relevant documents were produced as the trial progressed.

The essence of the dispute is set out in a non -controversial manner in the case summary. I have supplemented this by reference to the section of Mr Berragan's trial skeleton headed ‘Background’, which Mr Plunkett also accepted was non-controversial.

Potters is a limited company that specialises in waste management. Geminor is a limited company that specialises in the supply of waste products for energy recovery, known as energy from waste (or EfW). At the relevant time, Geminor essentially acted as a broker rather than an actual supplier.

On 4 August 2016, the Isle of Anglesey County Council (the Council) issued an invitation to tender. The parties began discussions with a view to submitting a joint tender to the Council. On 7 September 2016, Mr James Maiden (for Geminor) and Ms Debbie Potter (for Potters) both signed a written memorandum of understanding (or MoU).

At 11.52 on 9 September, Mr Carter emailed Mr Maiden, stating:

Mr Maiden replied at 12.13:

At 13.04 Mr Maiden emailed Mr Carter attaching (without further comment) a letter of support, the signed MoU and the Geminor Group 2015 Annual Report. All three of these emails were also copied to Ms Lindsay Davies and Ms Debbie Potter.

Potters submitted its tender bid to the Council before the deadline of 11 am on Monday 12 September 2016. The quoted price for the second option, of residual waste reception, haulage, and treatment, was £105.50 per tonne. The details of the proposed services were set out in the service delivery plans which comprised appendix 5 to the tender submission. This was a 42-page document containing full details of the offer and identifying each of the participants.

Mr Carter forwarded the Council's email acknowledging receipt of Potters' tender submission to Geminor at 5 pm on Monday 12 September.

Residual household waste was to be collected on Anglesey and delivered to a reception and transfer station at Gaerwen. The waste would be loaded into HGVs operated by Potters and transferred by road from Anglesey to the materials recovery facility operated by Gaskells in Bootle. Gaskells were to process and sort the loose waste as appropriate, removing recyclables and shredding, if required, prior to processing by compacting in a baler and wrapping the bales produced. These RDF bales were then to be collected by Geminor's nominated haulier, ET Morris of Hull, which would transfer the bales by road to the port of Immingham in north-east Lincolnshire. From there the bales would be unloaded by DFDS Seaways (DFDS) and shipped to Gothenburg in Sweden. Geminor would then be responsible for removing the bales, splitting them, and transferring them to a thermal treatment plant operated by Renova AB.

In his written skeleton argument, Mr Plunkett invited me to consider three documents in a little detail. The first is the memorandum of understanding signed by Mr James Maiden (for Geminor) and Ms Debbie Potter (for Potters) on 7 September 2016. Relevant provisions are as follows:

Mr Plunkett submits that Potters breached the terms of clauses 3.2, 5.3 and 10.2 of the memorandum of understanding. Mr Berragan points out that no consequences are pleaded as flowing from any such breach: It is not pleaded that Potters repudiated the memorandum of understanding or that Geminor accepted any such repudiation; and there is no counterclaim for damages nor any plea of set off.

The second document is an offer letter dated ‘Thursday’ 7 September 2016 to Mr Richard Carter of Potters and signed on behalf of Geminor by Mr James Maiden, Country Manager UK. (It is common ground that 7 September 2016 was a Wednesday.) This offer letter is headed ‘Re: Offer for RDF to Recovery Isle of Anglesey Contract’. It reads:

The third document is Geminor's letter of support which (together with the signed memorandum of understanding) was sent by Mr Maiden to Mr Carter as an attachment to an email timed at 13.04 on Friday 9 September 2016, the last working day before the deadline for the submission of the tender offer to the Council. This letter, dated 9 September, 2016 was addressed to Mr Carter and signed by Mr Maiden. It is headed (in bold): "Re Isle of Anglesey County Council - Residual Municipal Waste Processing and Recovery". The letter reads:

During the course of the trial, apparently on Friday 14 June 2024 (and thus after Mr Carter's evidence had been concluded), Geminor's solicitors gave additional disclosure of an email from Mr Carter to Lindsay Davies (of Geminor), and thus common to both parties, timed at 14.17 on 1 September 2016, of earlier drafts of:

In closing, Mr Plunkett indicated that had he known about these documents earlier, they would have featured prominently in his submissions. He relies upon the inclusion in the former document of the concluding words "Detailed terms will be subject to further Contractual Agreement"; and in the latter document to Geminor's confirmation “that we agree to process wastes in accordance with our usual acceptance criteria (attached) (subject to a final contract)".

Under cover of an email timed at 17.51 on October 2016, the Council notified Potters that the tender had been accepted for waste reception, together with haulage and treatment services, subject to a mandatory standstill period until 24 October. On the following day Potters advised Geminor of this fact.

A draft consortium agreement was drafted by solicitors instructed by Geminor (Grindeys) on 21 October 2016; and Geminor submitted this to Potters on 24 October for Potters to review. Mr Carter sent an amended version of this draft to Mr Maiden (copying in Ms Davies) on 3 November, commenting: "Please see attached. I think the tbc’s would be better done face to face. Would you be able to come down to Welshpool from 16^th onwards after Debbie returns from holiday?"

In due course, a meeting took place between representatives of Geminor and Potters at the latter's offices in Welshpool on Monday 28 November to discuss amendments to the consortium agreement. However, the parties never reached final agreement upon its terms, and no further contract was signed between Potters and Geminor. It is Potters' case that, as the consortium agreement was never signed, the MoU continued to govern the contractual relationship between the parties in relation to the Anglesey contract, following the acceptance of the tender bid. Geminor's primary position is there was no contractual relationship at all between the parties.

Potters' case is that the following were express terms of the contract:

Potters were being pressed by the Council to sign a formal contract for the Anglesey waste pursuant to their successful tender bid. This they did at some time between 15 and 19 December 2016. The initial contract period (subject to options to extend) was from 1 February 2017 to 31 July 2018. The contract incorporated the appendix 5 service delivery plans in Schedule 12.

By an email timed at 16.09 on 19 December, Mr Carter (of Potters) wrote to Mr Maiden and Ms Davies (of Geminor) asking whether Geminor had been able to amend their contract documents as discussed following their meeting at the end of November. I take this to be a reference to the consortium agreement. Mr Carter also notified Geminor that Potters had “now signed with Anglesey and also won the additional municipal buildings collection tender”. Mr Maiden responded, somewhat testily, by email at 09.31 the following morning as follows:

At 3.03 pm on 21 December 2016, Mr Carter forwarded the emails from the Council by which they had clearly been chasing the signed contract. He replied:

At paragraphs 57-60 of his witness statement, Mr Maiden recounts that he was "shocked" when he received Mr Carter's email of 19 December. It was Mr Maiden's opinion that Potters was treating Geminor like a sub-contractor rather than a joint partner.

There were delays before Geminor accepted any bales from Potters, which it only started to do in June 2017. After deliveries started, bales were rejected on the grounds of bale quality on two occasions. On 15 August 2017, one load was rejected at Immingham. This led to the temporary suspension of collections. Ms Sarah Gething (Gaskells' commercial manager) investigated the problem; and she provided a letter of apology, and assurances for the future, on the same day. She explained:

On 6 September 2017, DFDS notified concerns about bale quality dropping, but it confirmed on 7 September that it was prepared to accept the current bales, although it would reject further loads if they continued like this or deteriorated further. However, a full load was rejected later that same day Mr Gaunt (of DFDS) completed a case report, complaining of unstable, soft and damaged bales, unfit for the cassette upon which they were to be shipped, and exposed waste. He commented: "bales not fit for shipment".

Collections were again suspended. Ms Gething again investigated, and she provided a detailed response by way of email to both Geminor and Potters, timed at 13.10 on 8 September, as follows:

On 27 September 2017, DFDS again raised concerns about bales from three lorry loads which had already been loaded onto a cassette awaiting shipment to Gothenburg. Emails indicate that DFDS nevertheless regarded these bales as suitable for shipment. However, following email exchanges with Geminor, and acting on Geminor's instructions, on 28 September, DFDS rejected the three loads which had been placed on the cassette, together with a further six loads which had been delivered on 27/28 September and had already been loaded onto two further cassettes. These email exchanges are as follows:

At 17.25 on 4 October, Ms Gething sent a long email to Oliver Caunce and Richard Carter as follows:

At 12.24 on 6 October 2017, Oliver Caunce (of Geminor) sent an email to Richard Carter (of Potters), as follows:

The only other relevant communications are two emails from Richard Carter to James Maiden (both in the first supplemental bundle). The first is dated 27 October 2017 and reads:

The second email is dated 6 December 2017:

Potters avers that by refusing to collect any further bales of RDF, Geminor is in repudiatory breach of contract. Geminor avers that there was no contractual relationship between the parties in the first place; and to the extent that there was, the alleged poor quality of the RDF bales produced by Gaskells amounted to a repudiatory breach.

Potters claims that, due to Geminor's alleged breaches of contract, it has had to re-arrange the disposal of RDF arising from the Anglesey contract by more expensive means, and/or to dispose of other additional waste by more expensive means, in order properly to perform the Anglesey contract, due to its limited access to EfW capacity. At the start of the trial, Potters claimed losses totalling £923,156.50, plus statutory interest on this sum (as opposed to the £989,362 originally claimed in the particulars of claim). By the time Mr Berragan had finished presenting his closing speech, the claim had fallen to £801,041.20, with an alternative claim for the greatly reduced sum of £357,831.60.

In his written skeleton argument, Mr Berragan identifies the following determinative issues as arising from the statements of case:

Mr Plunkett reminds the court that, in general, a claimant in civil proceedings bears the burden of proof in establishing its case. He submits that Potters has failed to do so. More specifically, Mr Plunkett relies upon the following fundamental points:

The trial bundle comprises almost 3,000-pages, contained within seven original, and two supplementary, hearing bundles. Over four days, the court heard from six witnesses of fact for Potters and five for Geminor. A seventh witness for the claimant (Mr Craig Rixon) was not required to attend court because he had left Gaskells' employment as their site manager at the end of March 2017, and thus before any issues over the rejection of baled waste had arisen.

The court also heard (on Day 4 of the trial) from two expert witnesses in the field of waste management, disposal, and transportation: Mr Philip White, retained by Potters, and Mr Michael Brown, retained by Geminor. They had both been instructed to provide expert opinion evidence in relation to the quality of the bales produced by Gaskells, on behalf of Potters, and as to whether the bales were of sufficient quality to allow for onward transportation to Gothenburg. I accept that both gentlemen were appropriately qualified and experienced to opine on these matters. I found them both to be excellent, and reliable, expert witnesses.

Due to an unmoveable personal commitment on the part of one of the experts, their evidence was taken concurrently on Day 4 of the trial, before Geminor's last three witnesses had given their evidence. This meant that the clarification and testing of the experts' evidence was received in ignorance of the full evidence of two relevant witnesses of fact: Mr Gaunt and Mr Caunce.

At the end of the expert evidence, both counsel indicated that the preparation of a detailed agenda, and the taking of the experts' evidence concurrently, had enabled them to focus directly on the issues between the experts. They said that the process had worked well.

Mr Brown said that taking the expert evidence concurrently had felt a lot more efficient, and had saved time. Mr White thought that it had been a good way of doing things. He had previously given expert evidence many times in the traditional way, and taking the evidence concurrently had worked really well, provided one had two experts who were co-operating with each other (as I am satisfied was the case here).

As Mr Plunkett observed in closing, by the time their concurrent evidence had concluded, there was a great deal of harmony and agreement between the two experts. There was agreement that there had been no sampling and testing of waste at Gaskells' site after June 2016, and thus during the period when bales were being rejected. Both experts agreed that it would have been reasonable and sensible to have tested again after the first two loads had been properly rejected. There was agreement as to the relevance of evidence that Gaskells' waste had been successfully collected and shipped on other occasions. Mr Brown had not had any such evidence available to him, and he had only looked at the quality of bales during Gaskells' performance of the Geminor contract. There was also agreement that Gaskells had not routinely implemented the screening and shredding of waste. There was agreement that bale wrappings could tear during movement between different locations. There was also agreement that the first two rejected loads had been correctly rejected due to poor bale quality.

I reject Mr Plunkett's submission that Mr White had changed tack, and had effectively hardened up his evidence, by the time he came to sign the joint statement. I accept Mr White's assurance that he "maybe used slightly loose language". I accept that he has consistently been of the opinion that at least several of the nine, final lorry loads of waste could have been shipped successfully to Gothenburg. I find that Mr White's overall view was that the third rejected shipment of nine lorry loads of waste could have been successfully exported. Mr White said that there were some seven or eight bales in total which showed evidence of tears. Some of these could have been repaired, using heavy duty duct tape, leaving only between one and three bales which would need to be isolated and rejected, with the remainder of the nine lorry loads continuing on their journey overseas. It was common ground between the experts that there were no regulatory, or other compliance, hurdles that would have prevented that course.

Mr Brown would have advised the rejection of all nine lorry loads. Two separate lorry loads had recently been correctly rejected. There had been two separate recent warnings about poor bale quality, or bale quality slipping, involving two lorry loads on each of those occasions. Against that background, the discovery of more poor quality bales, at least one of which was leaking liquid waste, indicated a lack of consistent bale quality which invited a precautionary approach and the rejection of all nine lorry loads.

Apart from that precautionary principle, Mr Brown accepted that the photographs showed that at least two of the later lorry loads were capable of being shipped. But the presence of eight or nine damaged bales was sufficient reason for rejecting all nine lorry loads because DFDS was entitled to assume that the bales were all of a consistent, but poor, quality. However, Mr Brown did accept that, ultimately, those who were responsible for actually shipping the waste were the persons best placed to decide whether it should be loaded on board the vessel for export to Gothenburg.

Ultimately, the real issue between the experts was whether, as a result of the precautionary principle identified by Mr Brown, all nine lorry loads should have been rejected. At the end of the expert evidence, I drew the following analogy, derived from a report of a recent motoring incident in Manchester:

I bear the opinions of the expert witnesses firmly in mind as part of the overall evidence in the case. Ultimately, however, the propriety of the rejection of all of the last nine lorry loads falls to be determined by reference to the totality of the evidence in the case.

I turn now to consider each of the witnesses of fact in turn.

Mr James Potter. He is the claimant's managing director. He had made a very short witness statement as recently as 1 May 2024, his first - and only - witness statement in the case. He gave evidence for almost two hours, either side of the luncheon adjournment on Day 1. I have no doubt that Mr Potter was an honest witness who was seeking to assist the court to the best of his recollection. However, I am also satisfied that that recollection was extremely limited. This is because Mr Potter had gone through many years of treatment for cancer, involving, he told the court, ten operations, radiotherapy, chemotherapy and immunotherapy, starting in 2014. A constant refrain throughout Mr Potter's evidence was: "I don't know" or: "Ask Mr Carter", who had dealt with the Anglesey contract and had made the decisions about it. Although Mr Potter had verified the particulars of claim, he had done so on the basis of information supplied to him by Mr Carter and because, as Mr Potter said, he practically trusted Mr Carter with his life.

Mr Potter could not recall making any profit-sharing arrangement with Mr Gaskell, although had he done so he said that this would have also involved a sharing of any losses. Mr Potter confirmed Potters' case that Geminor had withdrawn from the Anglesey contract because it had underpriced the contract. Mr Potter confirmed that the other off-takers had had no spare capacity to dispose of RDF waste. He was firm in his evidence that none of the Anglesey waste had gone into landfill. Mr Potter was also clear that Gaskells had agreed to dispose of the Anglesey waste at cost price because they already owed money to Potters, but that Gaskells would get paid the full market price in due course, and whether Potters won or lost this case.

I accept Mr Potter's evidence to the extent that it is corroborated by the other witnesses and the contemporary documents. To the extent that Mr Potter's evidence differs from that of Mr Gaskell, I prefer Mr Gaskell’s evidence.

Mr Richard Carter. He is Potters' business development manager. He gave evidence for about three hours on the afternoon of Day 1 and the morning of Day 2. Despite a testing cross-examination by Mr Plunkett, Mr Carter was not shaken in his evidence. I find him to be a competent businessman, and an honest and reliable witness, who was doing his best to assist the court. I accept Mr Carter's evidence.

Mr Carter had not been aware of any profit-sharing arrangement with Gaskells until he had seen Mr Gaskell’s witness statement. Mr Carter confirmed that Mr Maiden had been very keen to ensure that everything had been done in a correct legal fashion, involving the production and execution of contracts to avoid any misunderstanding. Mr Carter believed that Geminor's offer letter of 7 September would have been accepted verbally: He said he would have spoken to Mr Caunce over the phone. That is not supported by Mr Caunce, and I make no finding of fact to that effect.

Since the consortium agreement had never been concluded, Mr Carter said that the parties had been working together on the basis of the 7 September offer letter. Mr Maiden had never responded to the rhetorical question posed in Mr Carter's email response of 21 December 2016: “Would you have had an alternative proposal other than to have signed the documents?" This was a reference to the Anglesey contract, following the successful acceptance of the tender bid.

Mr Carter said that Potters had fully intended to conclude the consortium agreement but, in Mr Carter's words: "Geminor chose to take umbrage and not pursue it". At paragraph 59 of his witness statement, Mr Maiden states that: "The consortium agreement went no further due to the actions of the claimant." However, Mr Carter's email, timed at 16.09 on 19 December 2016, inquiring whether Geminor had been able to amend their contract documents as discussed following their meeting on 29 December shows that the ball had clearly been in Geminor's possession since that time. I therefore prefer Mr Carter's analysis of the reason for the disappearance of the consortium agreement from any further active consideration to that proposed by Mr Maiden. Ironically, had Geminor pursued the consortium agreement, clause 10.5.1 of the draft, excluding liability for "any indirect, special or consequential loss or damage" might well have operated as a defence to the second limb of Potters' primary claim for damages in the present case.

Mr Carter did not accept that if there was a profit-sharing arrangement, then Potters was only going to receive £5, and not £10, profit per tonne. (I note, in passing, that those figures require considerable adjustment as a result of later changes to the underlying figures.) Mr Carter said this: "No, our company would have received £10 and then the company would be able to do with it whatever it chose to do." Later, Mr Carter explained that Potters was the entity which had incurred the debt and the liability, and so it was Potters which was bringing this claim, with Gaskells simply providing the necessary information as a service provider. As will become apparent, I accept that analysis of the position.

Mr Carter explained that the revenue per tonne under the Anglesey contract had been £105.50, and not £102 per tonne as stated in the updated schedule of loss. Mr Carter also explained that the various costs incurred by Potters in performing the Anglesey contract had included an additional charge of £3 per tonne for the reception and transfer of waste from the reception centre at Gaerwen. That, again, had been omitted from the updated schedule of loss.

Mr Carter confirmed that he had checked the data underlying Potters' calculation of its losses. He was tested about the availability of alternative waste processors, or off-takers, and he was firm in his evidence that there was no spare capacity in the marketplace: "We did go to Andusia and they didn't have any capacity spare, whether it be at £84 or any other price". Earlier Mr Carter had made the telling point: "James Maiden will be aware of the difficulties in the marketplace at the time, you know, to such an extent that he was only prepared to give us 66 per cent of the capacity that we requested, and that was for a local authority contract that he was desperately keen to win."

Mr Carter firmly refused to accept that the nine lorry loads had been properly rejected. He suggested that the leaking bale could have happened when DFDS had been transferring it on to the cassette. He said that one leaking bale was not a problem. He told the court that after this multiple rejection, dozens of lorry loads had been sent out from Gaskells’ waste processing centre without being rejected.

Mr Carter was clear that all references to 12,000 tonnes had been to an annual figure and not to a figure over the life of the contract. When he had omitted in his witness statement to use the expression ‘per annum’, he had done so on the assumption that everyone reading it would understand that he was referring to 12,000 tonnes per annum. Everything in the industry was done on a calendar year basis. Mr Carter was clear that Geminor had agreed to accept 12,000 tonnes per annum; and at the meeting on 28 November 2016, Mr Carter had tried unsuccessfully to up that figure.

I accept all of Mr Carter's evidence.

Mr John Gaskell. He is the managing director of Gaskells. He gave evidence for a little over one and a half hours, either side of the luncheon adjournment on Day 2. As with Mr Carter, I find him to be a competent businessman and an honest and reliable witness who was doing his best to assist the court. I accept his evidence.

Mr Gaskell confirmed that between 2014 and 2018, Gaskells had sent out some 3,000 loads of baled waste, and there had only been two loads rejected, apart from the Anglesey waste rejections. Up until September/October 2017, some 281 loads had been delivered to DFDS, with no problems apart from the rejected Anglesey loads. Mr Gaskell said that he had reached his profit-sharing agreement with Mr Potter in mid to late 2016. Mr Potter must have forgotten about it. There had been no agreement to share losses.

Mr Gaskell confirmed that there was never any discussion about tonnage over the life of the contract. References were always to weekly, monthly, or annual tonnages.

Mr Gaskell confirmed that all the Anglesey waste had been treated and then had either been baled or sent out loose in lorries operated by Gwynedd. Mr Gaskell was clear that Potters was not claiming for the costs of disposing of the displaced Anglesey waste, but rather what it had cost Gaskells to get rid of the waste displaced because Geminor had breached its agreement over the Anglesey waste with Potters: "The waste that we had to send out because we had to accommodate Anglesey, that's what this is all about. This is what Potters agreed to pay us."

Towards the end of his evidence, Mr Gaskell explained that at the time of the Anglesey contract, Gaskells had owed Potters a considerable sum of money so Gaskells had just thought it fair to get the Anglesey contract over and done with. Then Covid arrived, and Mr Potter was undergoing cancer treatment, so it was not really appropriate for Gaskells to start pushing Potters when Gaskells already owed Potters a great deal of money. Gaskells had therefore reached two agreements with Potters. The first was in relation to the actual cost of getting rid of the Anglesey waste; the other related to Gaskells’ own displaced waste. Gaskells sent the Anglesey waste as RDF to the cheapest EfW outlets they had at the time, which meant that they could not send their own waste to those outlets. That meant that Gaskells had had to send that waste to landfill.

After Covid, at the back end of 2021 or early in 2022, Mr Gaskell had agreed with Mr Potter to recover Gaskells' further and consequential losses, representing the opportunity cost of having to send more of Gaskells' own waste to landfill. Those costs would be charged to Potters, and then Potters would repay them.

Mr Connah Bishop. In 2016, he was working at Gaskells as a weigh bridge operative, reporting to Ms Gething. He was interposed during Ms Gething's evidence, on the afternoon of Day 2, for less than ten minutes. Mr Bishop had not operated the baler himself; and his knowledge was derived from his observations whilst walking around Gaskells' site. He confirmed that if a bale did not look right, then it would not be loaded for shipment. I accept Mr Bishop's evidence, subject to its inherent limitations.

Ms Sarah Gething. She is Gaskells' operations manager. She gave evidence for about one and a quarter hours on the afternoon of Day 2. Again I find her to be a competent manager, and an honest and reliable witness, who was doing her best to assist the court. I accept her evidence.

Ms Gething was clear that she had never previously experienced so many rejections in such a short space of time. In her email responses at the time, she had been trying to appease Geminor and keep them on side. Because she had been on holiday at the time, she had had to accept the first rejection at face value. She accepted that there had been problems with the second rejected load, which she had investigated at the time and discovered that due proceedings had not been followed when the load was going out. This was the only rejection which had resulted in a written case report from DFDS.

Ms Gething had never believed for one second that the nine loads should have been rejected. Of the nine rejected loads that had been returned to Gaskells' yard after further handling by DFDS, and amounting to some 177 bales, no more than ten had been below standard. Ms Gething could not recall how many of those bales had been rewrapped before they were sent out again; but the bales had been returned on 10 October, and they were reloaded and sent out again on the following day. Some of the bales had been loaded by Andusia and actually delivered to DFDS. Ms Gething considered dealing with damaged bales to be all part of the haulage and treatment process. I accept all of that evidence.

Ms Megan Caples. She is a management accountant employed by Gaskells. She had prepared the spreadsheet which forms the basis for Potters' updated schedule of loss. She was called on the morning of Day 3. I had suggested that Mr Berragan might wish to take her through her short witness statement by reference to the digital version of the spreadsheet, so as to explain how the Excel spreadsheet worked. However, Mr Plunkett objected to that course. Having verified her witness statement, Mr Plunkett declined to ask her any questions in cross-examination. This had the benefit, from his point of view, of denying Mr Berragan any opportunity to re-examine Ms Caples. But it also meant that the court had no oral evidence from Ms Caples. That concluded Potters' factual evidence.

Geminor's first witness was Mr James Maiden. He had set Geminor up in the UK and had acted as its first country manager for the UK. He had left Geminor's employment in or around September 2022, before this litigation commenced, in order to explore a new business opportunity elsewhere He had been succeeded by Mr Oliver Caunce. Mr Maiden gave evidence for a little over three hours, either side of the luncheon adjournment on Day 3.

I do not consider Mr Maiden to be a reliable witness. However, during a skilful and testing cross-examination, Mr Berragan made as many inroads into Mr Maiden's evidence, and secured as many helpful admissions from him, as Mr Berragan could sensibly have hoped for. I accept Mr Maiden's evidence where it is supportive of Potters' case. Where it is in conflict with the evidence of Potters' own witnesses, I prefer the latter.

Mr Maiden explained that he had not been responsible for actually putting his evidence down on paper. I am satisfied that aspects of his written evidence are wrong. At paragraph 49 of his witness statement Mr Maiden had said that the email of 12 September, enclosing the completed service delivery plan, was the first indication that Geminor had had that Gaskells were Potters' chosen materials recovery centre sub-contractor. In cross-examination, Mr Maiden at first reiterated that Gaskells had been brought into the Anglesey contract "late in the day" and "after the fact". Mr Maiden was then confronted with an email from Lindsay Davies to Richard Carter, timed at 16.35 on 1 September, reporting that she was "going to have to run these prices past James and have a discussion with him re Gaskells". In light of that email, and the reference to the collection of waste from Gaskells in Geminor's offer letter of 7 September 2016, which had actually been signed by Mr Maiden, he had to accept that he had known of Gaskells' involvement since 1 September; and that paragraph 49 of his witness statement was not true. Mr Maiden was unable to explain why he had made that false statement.

Mr Maiden explained that Geminor had been approached by a contractor based in north Wales with which it had had an existing strong relationship to see whether Geminor was interested in bidding for the Anglesey waste contract with it, but Geminor had had no capacity for any additional volumes of waste. At the time of the bid, Mr Maiden had agreed with Potters that the latter should be the lead bidder, with a view then to forming a separate SPV with Potters to contract with Anglesey. However, it is clear that whatever may have been the position originally, Mr Maiden appreciated, by the time the bid was submitted, that Potters alone would be contracting with Anglesey, in accordance with the Council's stated contractual requirements.

Mr Maiden accepted that Mr Carter had needed a commitment from Geminor on both price and quantities before Potters had submitted its tender bid. If the tender were successful, Mr Maiden had expected Geminor to be committed to both the price and the volume indicated. He accepted that Mr Carter would not have submitted a tender without that confirmation. Mr Maiden also accepted that he had known that Mr Carter had been going to submit a bid on Monday 12 September 2016. Mr Maiden's view was that once the tender deadline had passed, Potters would be bound by its tender bid.

Mr Maiden had arranged for Grindeys to be instructed to draft the consortium agreement under which Geminor would have been obliged to take all 17,000 tonnes of Anglesey waste, and that it was Potters that was to execute the contract with the Council. Mr Maiden accepted that in his 20 December 2016 email to Mr Carter, he had impliedly accepted that Potters would be taking up to 12,000 tonnes of Anglesey waste at the original price. He accepted that Potters and Geminor had proceeded on the basis that Geminor was going to take 12,000 tonnes per annum at the agreed price. That had been Mr Maiden's understanding.

Mr Maiden could not recall any negative feedback about the 15 loads that Gaskells had taken in January 2017, at a price of £85 per tonne, after Gaskells had negotiated this down from an initial quote from Geminor of £89 per tonne. Mr Maiden accepted that Lindsay Davies had told Mr Carter on 9 September 2016 that any badly wrapped bales deemed unsuitable for shipping would be quarantined and rejected. I reject, as contrary to the documents, Mr Maiden's suggestion that Ms Davies had been referring to ‘loads’ rather than ‘bales’.

Mr Maiden did not recall having done anything on receipt of the email from Mike Hughes, at 10.21 on 28 September 2017, providing a “further update from yesterday”, other than to send his response two minutes later at 10.23 stating: "Given the below comments you have to surely reject these bales." At paragraph 122 of his witness statement, Mr Maiden states: “Within this email I agree that the bales should be rejected given the issues reported." I do not consider this to be a fair representation of Mr Maiden's email, by which he was stating to Mike Hughes (on behalf of DFDS) that "you have to surely reject these bales." However, Mr Maiden continued to refuse to accept the proposition that he had taken the decision to reject the bales, rather than DFDS. Mr Maiden did accept that he had probably not known the number of lorry loads involved at the time of his email. He was reluctant to accept that the original three lorry loads, comprising some 80 bales, had been of a sufficiently regular shape and size to have been capable of being loaded on to a cassette. That was clearly the case.

Mr Maiden could not recall having spoken to Mr Caunce or to Mike Hughes after he had sent his email to Mr Hughes at 10.23; nor could he recall any discussions with Mr Hughes before receiving the 10.21 email. Mr Berragan notified the court that Potters' solicitors had been told that there were no missing email communications, despite the reference in the 10.21 email to a “further update from yesterday”. Mr Maiden accepted that he would have expected to have seen a formal case report from DFDS confirming its rejection of the nine lorryloads. Mr Maiden also acknowledged that: "It's not an entirely unusual situation for bales to be rejected, at the port ... from many different suppliers."

I am satisfied that the court has not been given a full account of all that passed between Geminor and DFDS on or around 28 September 2017.

Mr Maiden confirmed that Geminor would have incurred no further costs as a result of returning the bales: the logistics costs would have been passed on to Potters. Although Mr Maiden recognised that the margins on the Anglesey contract had been low, he asserted that Geminor had not been losing money on the job: it was what he described as "a penetrative pricing situation".

In re-examination by Mr Plunkett, Mr Maiden initially said that he thought that it had been understood that the price was agreed, being the £70 per tonne which they would apply to the Anglesey contract. Mr Maiden accepted that they were committed to the terms that governed the Isle of Anglesey contract. Shortly thereafter however, when asked by Mr Plunkett what his position was in relation to whether or not a contractual agreement had been in place, Mr Maiden said this:

I am afraid that I simply cannot, and do not, accept that evidence. It is inconsistent with the contemporaneous documentary evidence. It is inconsistent also with the inherent probabilities, and with Mr Maiden's expressed concern to achieve contractual certainty and a commitment over the bid from Potters.

The next witness was Mr James Crouch. At the relevant time, in 2017, he was employed by Geminor as a logistics associate. He is still employed by Geminor, currently as operations manager. His background is in logistics, and not in waste. He gave evidence on the afternoon of Day 3 for about 40 minutes.

Mr Crouch gave evidence that it was not always necessary to reject an entire load if there was an issue with a single bale. In such a case, the bale might be removed and put into a skip. Minor issues with a bale would not necessarily lead to it being rejected. If, however, there was clear evidence that there were several bales in the same condition, the whole load would be rejected. Mr Crouch could not recall any involvement with the rejected bales, other than being required to arrange for nine trailers to collect the rejected loads. His view had been that if matters could be improved, then the contract could continue.

Mr Crouch gave his evidence honestly, and I see no reason to reject it. However, that evidence contributes little to the resolution of the issues in this case.

Geminor's final three witnesses of fact all gave evidence on Day 5. The first was Mr Steven Gaunt, for less than one and a half hours in the morning. At the relevant time, he was employed by DFDS as a working foreman, receiving goods into the port of Immingham and handling them until their discharge from the port by ship, but also supervising a team of around ten warehouse operatives.

Mr Gaunt acknowledged that he had not been entirely responsible for his witness statement. At the outset of his evidence, I drew Mr Gaunt's attention to paragraph 31 of his witness statement, which reads: "The DFDS terminal is split into two sides. One is called Riverside the other is called Riverside." Mr Gaunt accepted that this was an error, because one side was called ‘Dockside’. He said he had pointed this out, but it had not been corrected. At paragraphs 71-73 of the witness statement, there are also inconsistent references to ‘Bruce Allen’ and ‘Allen Bruce’. The correct name was ‘Bruce Allen’. I am satisfied that ‘Allen Bruce’ had been lifted unthinkingly by the draftsman from the style of that name as set out in contemporaneous email addresses. That again had not been picked up or corrected. Again, it shows that Mr Gaunt was not entirely responsible for the drafting of his witness statement.

Mr Gaunt stated that if DFDS decided to reject a load, it would make out a case report. That was not done in relation to the nine final rejected loads. Mr Gaunt also confirmed that one split bale would not prevent the shipping of a load. There were ways one could deal with a single problem bale. Mr Gaunt had, however, rejected loads because of only one or two failed bales. He said that issues about bales were raised daily, and not just from Gaskells but from various sites. This, he said, was all part of the job.

Mr Gaunt was not sure whether any bales from Gaskells had ever split. The second rejection had been because the bales had been soft. Mr Gaunt accepted that the one torn bale that was plainly leaking as part of the third rejected consignment could have been damaged after it had been taken off the lorry that had transported it to the Port of Immingham. He accepted that that bale could have been repaired with heavy duty duct tape.

Mr Gaunt said that at the time of discharge, the first of the final three rejected lorry loads would have been fit for shipment. DFDS had not rejected the third series of loads. The earlier warning that DFDS had issued had been because DFDS had been making every effort to make the operation work: DFDS had been trying to prevent further bad loads from arriving at the port.

Mr Gaunt had been happy for the final rejected loads to be shipped. He could not recall any conversation with either Mr Caunce or Mr Maiden at the time of the third rejection. Mr Gaunt accepted that the evidence set out at paragraph 110 of his witness statement, (that in his opinion, the risk of shipping the bales was too great) had not been a true reflection of his opinion at the time of his emails of 27 September. Mr Gaunt said that he had no recollection of saying to anyone that any bales should be rejected. He accepted that between the time the first cassette had been loaded, and the email timed at 12.26 on 28 September, two further cassettes had been loaded with bales from a further six lorry loads. He accepted that, at the time they had arrived at the port, there had been no reason to reject them.

Mr Gaunt was clearly doing his best to assist the court almost seven years after the relevant events. However, I consider that his witness statement, which had clearly been prepared for him, was tendentious, and deliberately calculated to promote Geminor's case. Mr Berragan's skilful cross-examination secured as many helpful admissions as he could sensibly have hoped for from Mr Gaunt. I consider that the overall effect of Mr Gaunt's evidence establishes that it was not DFDS that had made the decision to reject the final nine lorry loads of Gaskells' processed Anglesey waste. I find that this must therefore have been a decision made by Geminor.

The next witness was Ms Lindsay Davies, who gave evidence before the luncheon adjournment for about 40 minutes. She had started working for Geminor in or around April 2016, and had been contracted to work three days a week as bid manager. She is no longer in Geminor's employment. In his closing speech, Mr Plunkett described Ms Davies as an excellent, and a truly independent witness. I do not share this assessment of her. During the course of Ms Davies's evidence, it became clear to me that she had little actual recollection of the events of 2016 to 2017. I accept, consistently with the contemporaneous documentation, Ms Davies's evidence that: (1) by the time the bid had been prepared, it was clear that Potters would be acting as lead bidder, and would be signing any resulting contract with Anglesey; (2) she could not recall any real issues with the bid that had been submitted; (3) she knew, on 1 September 2016, that Gaskells would be processing the waste; and (4) she appreciated that any consortium agreement would probably only be signed after Potters' bid had been accepted.

Mr Plunkett relied upon Ms Davies's evidence as demonstrating the overarching need for, and the importance of, a concluded, and signed, consortium agreement. I reject that analysis of the evidence as inconsistent with the contemporaneous documents. Nor do I accept Ms Davies's evidence that she had understood Geminor to have participated in the tender bid without having received any contractually binding commitment from Potters that Geminor would be providing the off-taker service. However, I also recognise that the test for contractual formation is an objective one: the parties' unexpressed intentions or opinions as to whether there is any binding contract are strictly irrelevant.

The final witness was Mr Oliver Caunce. He gave evidence for about one and three quarter hours on the afternoon of Day 5. His role in 2017 was as account development manager. He is now Geminor's Country Manager UK, having succeeded to Mr Maiden's position in or around October 2022. Mr Caunce is, therefore, effectively the person responsible for Geminor's defence to this claim. As such, it was he who signed the statement of truth verifying the defence.

I find Mr Caunce to be a most unsatisfactory witness. He was evasive, with a tendency to ramble, and prone to speculation and after-the-event reconstruction and rationalisation. He seemed to experience difficulty both in understanding, and also in answering, Mr Berragan's questions in cross-examination. Passages in Mr Caunce's witness statement followed almost verbatim the terms of Mr Maiden's witness statement; but Mr Caunce refused to accept that someone else had written his witness statement for him.

I do not find Mr Caunce to be a reliable witness. I cannot accept his evidence where it conflicts with the evidence of the witnesses called by Potters, or where it conflicts with the evidence of Mr Gaunt, as modified and explained during the course of his cross-examination.

Mr Caunce had not been involved in putting the bid together, or in submitting the tender to Anglesey, other than by way of calculating the costs which had fed into the model for the tender bid, and providing this costing information to Ms Davies. Mr Caunce refused to accept that Geminor had underbid for the Anglesey contract and wanted to get out of it, although he did accept that it was "low margin". Later in his cross-examination, Mr Caunce accepted that there was not an unlimited capacity for the disposal of RDF waste through EfW off-takers, and that Potters would have had to find new EfW outlets after Geminor refused to accept any further waste from Gaskells, although he professed himself unable to comment on Potters' internal waste flows. Mr Caunce did not agree - although he did not expressly disagree - that there was a very real possibility that if Potters lost one outlet for RDF waste, it would not be able to send all the RDF waste it might wish to other EfW outlets. Mr Caunce commented that it was not for him to speculate (although he had been prepared to speculate on the contents of his telephone conversations with representatives of DFDS at the time of the third series of bale rejections). Speculation, for Mr Caunce, was a selective exercise, permissible when it might benefit Geminor, but impermissible when it might benefit Potters.

Mr Caunce was not aware of any discussions with Mr Carter about fixing a spot price for dealing with the Anglesey waste. Nor could he recall any conversations with Mr Carter in which he had confirmed that Geminor would be acting on a spot, or ad hoc, basis.

At paragraph 74 of his witness statement, Mr Caunce stated that he was made aware of a third rejection of Gaskells' RDF bales on 28 September 2017, in an email from Mr Maiden to DFDS personnel and himself, timed at 10.23. Mr Caunce said that he had been shown a copy of this email at the time of making his witness statement. In cross-examination, he accepted that at that point the bales had not yet been rejected and that he had "got ahead" of himself in that paragraph of his witness statement. In closing, Mr Berragan submitted that once paragraph 74 falls away, Mr Caunce's witness statement provides no proper, or full, explanation of when these bales had been rejected, or of who had rejected them.

At paragraph 77 of his witness statement, Mr Caunce said: "I do remember having a telephone conversation with Steve Gaunt of DFDS around this time however, the specifics of our conversation I cannot remember but we did discuss the quality of Gaskells' bales and Steve explained the need for them to be rejected due to their poor quality." Mr Caunce then went on to refer to his email to Mr Carter timed at 11.13.

I am afraid that it is necessary to refer to the transcript of the whole of Mr Caunce's cross-examination on the issue of the rejection of the last nine trailer loads of Gaskells' waste, at pages 128 to 136 of Day 5 of the trial. I do not propose to burden this judgment by reproducing those pages. I have, however, borne them firmly in mind. It is clear that Mr Caunce had no real or present recollection of any telephone conversation with anyone at DFDS. Rather, he was prepared to engage in speculation and after-the-event reconstruction and rationalisation of how any telephone conversation with whoever it was at DFDS might have proceeded. There is, however. one telling, final exchange which I must reproduce:

It will be recalled that Mr Gaunt had been unable to recall any conversation with Mr Caunce at the time of the third rejection.

That concludes my review of the witness evidence. In light of that comprehensive review, I can, I hope, be brief in the remaining sections of this already over-lengthy extemporary judgment, especially since there is little between counsel on the applicable law apart from differences of emphasis.

I remind myself that the test for contractual formation is an objective one: the parties' unexpressed opinions as to whether there is any binding contract are strictly irrelevant. In deciding whether the parties have reached agreement, the courts normally apply the objective test.

The issue whether there was a relevant contract between Potters and Geminor turns upon the contemporaneous documents and the parties' conduct. Mr Berragan referred me to the leading judgment of Asplin LJ in Mackie Motors (Brechin) Ltd v RCI Financial Services Ltd [2023] EWCA Civ 476 at [37], citing earlier observations of Vos LJ in a 2016 authority. In summary:

It is common ground that Potters and Geminor intended to, and did, create legal relations in respect of the memorandum of understanding. In essence, Mr Berragan submits that the offer letter dated 7 September, and the letter of support dated 9 September 2016, were expressed as offers of further, or supplemental, terms. Read in context, these would enable Potters, as the lead bidder, to submit a tender within the deadline as the lead bidder, supported by the various other information and documents supplied by Geminor for the same purpose. Read together, these documents are said to contain the essentials with sufficient certainty to be enforceable. That they were of sufficient certainty is demonstrated by the parties' conduct subsequently in carrying out the agreement, under those terms. The fact that the parties also provided for the entry into a more detailed consortium agreement does not affect this analysis, since the parties (and principally Geminor) abandoned their attempt to conclude this further supplemental agreement.

Mr Plunkett emphasises that, in general, a contract is made by the acceptance of an offer, or by the parties signing an agreement containing the agreed terms. Relying upon Tekdata Interconnections Ltd v Amphenol Ltd [2009] EWCA Civ 1209, [2010] 2 All ER (Comm) 302, Mr Plunkett points out that the courts continue to regard offer and acceptance as being (usually) the correct method of analysing the making of a contract. Mr Berragan points out that acceptance of an offer can be communicated either in writing, or orally, or by conduct, or by a combination of any one or more of these three methods.

Mr Plunkett says that there is no real separation between the formation of the contract and the ascertainment of its terms because the offer and the acceptance must mirror each other exactly before a contract is concluded. An acceptance of an offer must usually be communicated to the person by whom the offer was made. For a contract to be legally binding, it must be certain and complete. Even a long-term relationship does not necessarily equate to a binding contractual relationship, as is demonstrated by the case of Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737.

In essence, Mr Plunkett submits that in this case the parties proceeded on the basis that there was no binding contractual agreement for Geminor to accept any fixed tonnage of Anglesey waste. Geminor did not have to make any long term commitment to take a specific tonnage. It could assist Potters by operating on an ad hoc basis, which might still have involved the receipt of many thousands of tonnes. Potters would have had the ability, if it so desired, to use another contractor in place of Geminor. In all walks of commercial life, suppliers provide services on a continuing basis, often over a substantial period of years, to the same customer; but this does not mean that the supplier is contractually obliged to continue to supply their services. The supplier is free to walk away; and the customer is free to decline to engage the supplier.

Geminor was quite willing to be bound by a contract in due course; but its terms had yet to be agreed. It was Geminor who had initiated the execution of the memorandum of understanding, and also instructed solicitors to prepare the draft consortium agreement for signature. That is because Geminor needed to know where it stood contractually. Geminor's position was that everything was subject to contract, i.e. it was subject to signing the consortium agreement. There was no intention to create a legal relationship of the nature contended for by Potters. The insistence on the part of Geminor for contractual certainty, in the form of a signed, written consortium agreement drafted by lawyers, negates the suggestion that Geminor had entered into a binding contract based on an exchange of emails. If, after it was awarded the Anglesey waste contract, Potters had abandoned Geminor and used another RDF off-taker instead, Geminor would have had no contractual remedy against Potters.

Mr Plunkett relies upon the leading judgment of Lewison LJ in Joanne Properties Ltd v Moneything Capital Ltd [2020] EWCA Civ 1541. At [12], Lewison LJ observed that whether two persons intend to enter into a legally binding contract is, of course, to be determined objectively. But the context is all important. In that case, the most important feature of the context was the use of the phrase ‘subject to contract’. At [34], the judge provided a useful summary:

Lewison LJ also drew a useful distinction at [25]-[26] under the heading ‘Incomplete agreements’:

I have no hesitation in preferring Mr Berragan's submissions to those of Mr Plunkett. I am entirely satisfied that the parties concluded a binding contractual agreement, with the intention of thereby creating legal relations. They did so by a combination of the memorandum of understanding, the 7 September offer letter, and the 9 December letter of support. By proffering these documents to Potters, in my judgment Geminor made an offer to contract on the terms of the offer letter, namely, to collect 12,000 tonnes per annum of RDF waste from Gaskells' Bootle site at a price (subject to currency fluctuations) of £70 per tonne, over a period running from 1 February 2017 to 21 July 2018.

That offer was accepted by Potters, within the 14 days acceptance period, when Potters submitted the tender bid before the 11 am deadline on Monday, 12 September, and then communicated that submission to Geminor later that same day.

Mr Plunkett challenges Mr Berragan's submission that the communication to Geminor of the submission of the tender to the Council constituted an acceptance of the offer letter dated 7 September. He acknowledged in closing that there was not a great deal that he could say about that “… because you’re either with me or you’re against me on that point. But it really is a basic legal proposition and I say you should come down on the side of my contentions." I am afraid that I prefer Mr Berragan's legal analysis and submissions.

In his reply, Mr Berragan referred to Mr Plunkett's suggestion that one could not accept an offer by conduct, in this case by first of all submitting a tender and then communicating that fact. In Mr Berragan's submission, one plainly could. In this context, Mr Berragan suggested one could draw a useful analogy with an ‘if’ contract, or what used to be called a unilateral contract. In other words, on analysis, what was being said was, “if you submit this tender, then we will agree to provide these services”. And of course that was in the context of everyone fully anticipating that the tender would be submitted. The old example used to be: “If you walk to York, I will give you £20. If I set off walking, you can't then call me back.”

I accept Mr Berragan’s analysis and submissions. Clearly, the acceptance of the offer needed to be communicated by Potters to Geminor; but that was achieved when Potters communicated the fact of the submission of the tender bid to Geminor.

In my judgment, Mr Plunkett can derive no assistance from his ‘subject to contract’ argument, for the reasons that Mr Berragan provided in closing at pages 37 to 41 of the transcript of Day 6. In summary:

Mr Plunkett also places reliance upon alleged breaches of the memorandum of understanding. However, I find that there was no breach of either clause 3.2 or 5.3. The correspondence clearly demonstrates that Geminor knew, and accepted, that Potters would be submitting a bid before the tender deadline expired at 11 am on Monday, 12 September. Indeed, Mr Maiden expressly requested a copy of the completed bid for Geminor's records in the first of his emails of 9 September 2016.

If there were any technical breach, it was clearly waived. In any event, there are no consequences that would flow from any technical breach of the memorandum of understanding. Any breach was clearly not repudiatory; nor if it was, was any breach accepted as putting an end to the memorandum of understanding. The parties continued to work, albeit slowly, towards the production of a consortium agreement.

Much the same applies to any alleged breach of clause 10.2, relating to the failure to sign a consortium agreement before Potters signed the contract with Anglesey, confirming the acceptance of its tender bid. In any event, I find that the responsibility for the failure to complete the consortium agreement rests with Geminor rather than Potters. Furthermore, even if there were a breach of clause 10.2 of the memorandum of understanding, it was never relied upon by Geminor as a repudiatory breach which it then accepted as putting an end to the memorandum of understanding.

That document continued to be governed by the provisions of clause 13.1. Since none of the events provided for in that clause ever occurred, the memorandum of understanding remained in full force and effect. That document was not just a stepping stone on the way to a future contract; it actually constituted a contract in and of itself.

My finding that there was a binding contract between the parties is entirely consistent with the following:

I am satisfied that there was sufficient certainty as to the terms of the supply contract. Any further detail was capable of being supplied by the implication of any necessary supplemental terms.

I agree with Mr Plunkett that the precise content of any implied terms of the contract is a matter of little moment. As Mr Berragan points out, the test for the implication of a contractual term is whether that term is necessary and/or obvious in order to give business efficacy to the contract. It is not enough that the term may be a reasonable one.

I am content to accept the experts' agreed formulation that the baled waste:

Mr Berragan accepts that bales needed to be of a suitable shape and size to be handled and transported. Conventionally, that meant that they should be roughly square in section, rather than round, although that did not need to be exact; and that they should weigh approximately 1.1 tonnes. Mr Berragan also accepts that there was an implied term that the parties would co-operate to ensure the effective performance of their agreement and of the Anglesey contract.

Mr Berragan submits that the relevant test is whether any breaches of contract by Potters were sufficient to deprive Geminor of substantially the whole benefit which it was intended it should obtain from the contract. Mr Berragan emphasises that that is a high bar. The highest level relevant authority is the decision of the House of Lords in the case of Federal Commerce & Navigation Co Ltd v Molena Alpha (‘The Nanfri’) [1979] AC 757. There, Lord Wilberforce said (at page 779C) that “to amount to repudiation a breach must go to the root of the contract."

Mr Plunkett invites the court to bear in mind that the phrase “which will deprive the party not in default of substantially the whole benefit of the contract” may be apt to mislead because, on a first reading, one might assume that, in order to terminate a contract for breach, nearly all of the benefit of the contract has to have been lost. Mr Plunkett submits that a clearer formulation is whether a party has been "deprived of a substantial part of the benefit for which it contracted”. Mr Plunkett emphasises the words "deprived of a substantial part". Put that way, Mr Plunkett submits that the threshold test enabling termination for repudiatory breach to occur is much lower.

I note that at page 779 letters C to D, Lord Wilberforce considered that:

The experts agree that it was appropriate for DFDS to reject the single lorry loads referred to as the first and second loads on 15 August and 8 September 2017. However, it is common ground that Geminor resumed collections of waste from Gaskells processing site after these dates. The issue of repudiatory breach, therefore, does not arise in relation to those two deliveries, save as part of the commercial background. That context also includes the various matters identified at paragraph 89 of Mr Berragan's skeleton argument, as expanded during the course of his oral closing. I bear those matters in mind. Where the experts are not agreed is as to whether it was appropriate to reject all nine lorry loads of the final series of consignments on 27 and 28 September 2017.

I find considerable force in Mr Berragan's closing submissions that:

I am satisfied, on the evidence, that it was not DFDS that decided. entirely independently, and based upon its own assessment of the quality of the bales, that it was appropriate to reject all nine lorry loads of the final series of consignments on 28 September 2017.

At best, I find that DFDS was heavily influenced in its decision by the views and representations of Geminor. Indeed, I am satisfied that those views and representations, entertained and made by Geminor, were determinative of the decision to reject. Regrettably, the court is hampered in discerning a clear, and full, picture of what actually transpired between Geminor and DFDS on 27 and 28 September by what I am satisfied are: (1) disclosure failures on the part of Geminor; and (2) a lack of candour on its part and on the part of its witnesses.

On the balance of probabilities, I agree with the views of Mr White, Potters' expert, that the third rejected shipment of nine lorry loads of waste could, and should, have been successfully exported. I find that there were some seven or eight bales of waste, in total, which showed evidence of tears. Some of these could have been repaired using heavy duty duct tape, leaving only between one and three bales which could, and should, have been isolated and rejected, with the remainder of the nine lorry loads continuing on their journey overseas. In arriving at this finding, I have borne in mind Mr Brown's competing precautionary, and cautious principle and approach.

What is clear is that it was not DFDS that made the decision to reject all nine lorry loads of waste. That is clearly evidenced by the lack of any rejection form, the need for which was acknowledged by Mr Gaunt in his oral evidence. I find the absence of such a form to be telling.

On that footing, I find that there is no question of any repudiatory breach of contract.

Assuming, however, that I am wrong, and that the rejection of all nine lorry loads was justified, I am satisfied that the consequent breach of the implied terms of the contract between Geminor and Potters was not a repudiatory breach which went to the root of the contract, and which justified Geminor in refusing to accept any further baled waste from Gaskells' site. I am satisfied that the presence of seven or eight, or even nine, potentially non-conforming bales amongst nine lorry loads, and 177 bales in total, does not justify the conclusion that Gaskells was refusing to produce conforming bales, or that Potters had evinced an intention not to comply with its obligations under the agreement, or otherwise deprived Geminor of a substantial part of the benefit of its contract with Potters.

In arriving at that conclusion, I bear in mind that:

Even though Potters' schedule of loss had been updated as recently as the middle of March 2024, it contains a number of glaring errors, more of which emerged during the course of the trial. These Mr Berragan sought to address by producing, on the morning of the last day of the trial, both a revised schedule of loss, setting out his primary claim for damages on what he described as ‘a hybrid basis’, claiming both direct and indirect losses (within both limbs of Hadley v Baxendale (1854) 9 Exch 341), and an alternative calculation seeking to recover only direct losses (within the first limb). The effect of this has been to reduce the primary claim from £908,355 to £801,41.20. Mr Berragan also abandoned the claim to recover three invoices for the cost of returned loads in the total sum of £14,801.50.

On the same morning, Mr Plunkett also produced his own calculation of loss, based on the assumption that all the Anglesey waste had gone to EfW. This produced a loss of profit of only 58p per tonne.

The adjustments that have needed to be made to the updated schedule of loss are, I think, as follows:

Potters is entitled to be placed in the position in which it would have been if the contract had been performed by Geminor. This would have involved Geminor in taking an additional 17,220 tonnes of waste at the agreed rate of £70 per tonne, adjusted to reflect currency fluctuations.

The waste which Geminor failed to collect all had to be disposed of as refuse derived fuel to an energy from waste outlet. After Geminor refused to collect any more consignments of waste from Gaskells' facility at Bootle, after 28 September 2017, Potters continued to transport the waste to Gaskells, and Gaskells continued to process and bale the waste. Gaskells then made arrangements for the baled refuse derived fuel to be collected and disposed of via two other energy from waste outlets. One was Andusa, which collected baled waste. The other was Gwynedd Skip and Plant Hire Limited, which collected unbaled waste in loose form. There may have been other contractors. Those were outlets with which Gaskells already had arrangements for disposing of RDF generated from other waste sources. However, there was a limit to the total tonnage of RDF which each outlet could take. As a consequence, Gaskells had to divert some of its own waste to landfill, which would otherwise have been collected by Andusa or Gwynedd, as RDF, to generate energy from waste. Sending this waste to landfill was more expensive than sending it as RDF for EfW, not least because of the landfill tax which was thereby incurred.

The costs incurred by Gaskells in disposing of the waste which Geminor should have collected therefore include two elements, which are separated out in Mr Berragan's revised schedules of loss. They are:

Mr Plunkett has vigorously challenged the basis for calculating damages in this way. However, I am entirely satisfied, notwithstanding Mr Plunkett's carefully presented submissions, that the evidence of Mr Gaskells and Mr Carter, and the unchallenged evidence of Ms Megan Caples, has sufficiently proved the claim for damages that Potters has advanced on its hybrid basis.

Although it has taken some time, and effort, to arrive at accurate final figures, I am satisfied, on the evidence, that the true loss suffered by Potters as a result of Geminor's repudiatory breach of the agreement to collect the Anglesey waste up to a figure of 12,000 tonnes per annum, at a price of £70 per tonne (adjusted for currency fluctuations) is as set out in Mr Berragan's revised, updated schedule of loss.

There are, however, a number of potential defences advanced by Mr Plunkett that I need to address.

The first is whether the second limb of the hybrid claim is too remote. The general rule is that loss is too remote if the type of loss in question could not reasonably have been contemplated by the defendant as a serious possibility at the time the contract was made, assuming, of course, that at the time the defendant had thought about the breach.

Mr Plunkett submits that it was not reasonably foreseeable, or in the reasonable contemplation of Geminor, as a serious possibility, that in the event of its breach of contract, Potters would enter into new contractual arrangements whereby Gaskells would substitute its own non-Anglesey waste and send it off to landfill in order to create sufficient capacity to accommodate the RDF waste which, consistently with its contractual obligations, Geminor should have collected and delivered at the Port of Immingham, for onward shipment to the energy from waste facility in Gothenburg in Sweden.

Mr Plunkett submits that it was not within the reasonable contemplation of the defendant, as a serious possibility, that Gaskells would deposit such waste in Potters', and other third parties', landfill sites, and that Gaskells would then charge Potters for the additional costs of doing so, leaving Potters to seek to recover such losses from Geminor.

I am satisfied, on the evidence, that this was within the reasonable contemplation of Geminor, as a serious possibility, at the time it submitted its letter of offer on or around 7 September 2016. The fact is that Geminor knew of the limited capacity for the disposal of refuse derived fuel to generate energy from waste at the time. That was the very reason it had limited its obligation to collect Anglesey waste to only 12,000 tonnes per annum, rather than the 17,000 tonnes per annum which was the capacity desired by Potters. I am satisfied that the second category of damage is not too remote.

The next point raised by Mr Plunkett is that Potters incurred no liability to Gaskells as a result of Geminor's repudiatory breach of its contract with Potters. Mr Plunkett submits that if there is any liability on the part of Potters to pay anything to Gaskells, it is because Potters chose to enter into a new contractual arrangement with Gaskells. He says that this is wholly independent of Geminor's breach of contract. He says that the reality, which has only become apparent in recent months, as further disclosure has been given, and Potters has served further evidence, is that Potters and Gaskells were effectively operating as joint venturers, or partners, once Geminor withdrew its collection services in October 2017. He says that, most probably, Potters and Geminor had been in such an existing relationship even before this date.

I am entirely satisfied that this arrangement was entered into as a result of the need to address Geminor's repudiatory breach of its contract with Potters by declining to continue to accept waste deliveries from Gaskells' Bootle treatment centre, and in order to mitigate Potters’ losses. I am satisfied that that was a reasonable course for Potters to have taken in order to address the loss of capacity that followed from Geminor's decision to refuse to collect any further waste.

Mr Plunkett's next point is that Potters has not yet paid Gaskells for these services; and that, since the contract ran from roughly October 2017 to the middle of July 2018, any claim by Gaskells to recover such losses now would be statute barred.

I am entirely satisfied that Potters has acknowledged its liability to Gaskells in respect of these sums, such that it is no longer in any position to raise any limitation defence. In any event, a defence by way of a plea of limitation is something that needs to be raised in the pleadings by way of defence to any claim by Gaskells against Potters. Clearly, Potters is under a duty to mitigate its losses; but that does not extend to pleading a limitation defence that would interfere with an existing, and long-standing, commercial relationship between two commercial entities. I am entirely satisfied that it would not be reasonable to require Potters to plead a limitation defence to any claim by Gaskells, even if such a defence wer still available to it.

Mr Plunkett then says that any profit was to be divided 50/50 between Potters and Gaskells, and that it is not open to Potters to seek to recover that moiety of the profits that would have been enjoyed by Gaskells. In my judgment, that submission is not properly available to Mr Plunkett.

Geminor's liability in damages is for the full amount of the loss of profit and consequential losses that Potters has incurred as a result of Geminor's repudiatory breach of contract. What Potters then choses to does with any damages it may recover is nothing to the point, as Mr Carter recognised. It is for that reason that Mr Berragan cannot properly submit that the profit share is part of the costs of performing the Anglesey contract. The arrangement with Gaskells was for a share of the profits which Potters would have made had Geminor complied with its contractual obligations. What Potters then does with those profits is entirely a matter for itself. If I can be excused resort to Latin, it res inter alios acta.

So, for those reasons, I reject all of Mr Plunkett's suggested defences to Potters' damages claim. I am satisfied, notwithstanding all the points that Mr Plunkett has so forcefully made, that Potters, through the evidence of Mr Carter, Mr Gaskells and Ms Caples, has sufficiently evidenced and established its claim to damages on the basis of the hybrid, revised calculation of loss produced by Mr Berragan on the last day of the trial.

In short, I find that Potters is entitled to recover damages on its primary, and hybrid, basis in the total sum of £801,041.20.

As Mr Berragan acknowledged towards the end of his reply, it may well be that the fact that Potters has not yet been invoiced by Gaskells for a substantial part of that loss, and has therefore not yet had to pay it, may prove to be relevant when the court comes to consider the point from which interest on damages falls to be paid. But I do not consider that the fact that monies remain outstanding as between Potters and Gaskells affects the quantum of the award of damages against Geminor.

For the sake of completeness, although it is unnecessary to do so, I should make it clear that, had I rejected Mr Berragan's primary claim for loss on a hybrid basis, I would have accepted his alternative basis for claiming damages for the direct loss only sustained as a result of the inability to send all of the Anglesey waste through Potters. I am satisfied that it is open to Potters to claim loss on the alternative, direct basis. Indeed, that was the basis upon which Geminor had originally understood the original schedule of loss to have been calculated.

Mr Berragan took me to the decision of the Court of Appeal in the case of Perestrello E Companhia Limitada v United Paint Company Ltd [1969] 1 WLR 570. In particular, he invited my intention to passages towards the end of the judgment of the court, delivered by Lord Donovan. It is sufficient for me to refer, first, to page 579 between letters E and G:

I am satisfied in the present case that the defendant, Geminor, has had fair warning of a claim for damages which would extend to the alternative basis of what has been referred to as the ‘direct loss’ only. Therefore, had I not given judgment for £801,041.20, I would have given judgment for the alternative sum of £357,831.60. I make it clear that both of those sums have been sufficiently made out on the evidence in this case, despite the valiant efforts that Mr Plunkett has made to seek to reduce those amounts.

That concludes, finally, this extemporary judgment, apart from setting out, in section VIII, my conclusions.

I find that there was a binding agreement between Potters and Geminor. The relevant terms of that agreement required Geminor to collect 12,000 tonnes per annum of baled waste from Gaskells' site in Bootle and to transfer it to Immingham, for onward transportation to Gothenburg, at a price of £70 per tonne (subject to the agreed currency fluctuations).

I find that there was no repudiatory breach of contract on the part of Potters, and that, by refusing to collect further waste after 28 September 2017, Geminor was itself in repudiatory breach of that contract.

I find that the appropriate measure of damage for that breach is £801,041.20. Had I not accepted Potters' primary claim on damages, I would have assessed damages at £357,831.60.

As was discussed when the hearing concluded last Wednesday, since Mr Berragan is not able to be here today for the handing down of this judgment, I adjourn all consequential matters.

I grant an extension of time for any application for permission to appeal; and I also extend the time for appealing to 21 days after that consequentials hearing, subject to any further order of the court. Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof.