Calculation of waste recycling credits to be paid to applicants – Whether should be calculated according to contract-based method or process-based method – Whether in adopting process-based method respondents failing to comply with Environmental Protection (Waste Recycling Payments) Regulations 1992 reg 2(2) – Application allowed
Scarborough Borough Council (SBC) was the waste collection authority and North Yorkshire County Council (NYCC) the waste disposal authority under the Environmental Protection Act 1990. Where SBC recycled waste it was entitled to payment from NYCC, to reflect the saving made to NYCC in disposing of the waste. Waste that could not be recycled was disposed of by NYCC at two separate landfill sites. Section 52(1) of the Environmental Protection Act 1990 provided that payment should be “of such amounts representing its net saving of expenditure”. Regulation 2(2) of the Environmental Protection (Waste Recycling Payments) Regulations 1992 was made for the purposes of determining the “net saving of expenditure” and stated that the amount “shall be equal to half the expenditure which it would have incurred in disposing of the waste … using its most expensive disposal method”. NYCC paid waste recycling credits to SBC at a rate based upon the cost of using the “most expensive disposal method”, namely the more expensive of the two landfill sites. The 1992 Regulations were amended in 1994. In April 1997 NYCC accepted a report, which recommended that, as a result of the 1994 amendments, waste recycling credits should be paid on a different basis, namely the process-based method based on the costs associated with the different physical processes used for disposal rather than the contract-based method. As no other process other than landfill was used by NYCC, the cost associated with “the most expensive disposal method” under the new calculation would be a weighted average of the cost of using the two landfill sites. On 28 August 1997 NYCC resolved that the new method of calculating waste would begin in October 1997. SBC applied to quash that decision on the ground that NYCC had failed to comply with the 1992 Regulations and its decision was ultra vires.
Held The application was allowed.
Once the adjective “expensive” was attached to the word “method” there were comparative costs, and one had to have regard to the individual contracts. That was the natural meaning of the regulations when landfills occupied different sites and one site was more expensive than the other. Parliament had deliberately required the most expensive method to be identified, as it encouraged waste disposal authorities to enter into flexible contracts that enabled them to keep their costs as low as possible. As a result, the rewards to waste collection authorities which recycled their waste would be maximised. The regulations required waste recycling credits to be calculated in accordance with the contract-based method.
Richard Langham (instructed by Sharpe Pritchard, London agents for the solicitor to Scarborough Borough Council) appeared for the applicants; William Upton (instructed by the solicitor to North Yorkshire County Council) appeared for the respondents.
Sarah Addenbrooke, barrister