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Sita sues LAS Waste over recycling plant contract

Waste and recycling company Sita (UK) is headed for a High Court showdown with LAS Waste (LAS) in a row about a plant removal contract. Sita agreed to pay LAS £5,000 to remove redundant plant and equipment from a recycling site in Dorset, but says that after delays, LAS demanded payment of £350,000 or storage charges of £1,000 a week. Sita has turned to the High Court and is asking it to rule that the contract was for LAS to remove redundant plant for £5,000 plus VAT. The company also seeks a declaration that removal of the plant was entirely for its benefit and not for LASs benefit, and that it is entitled to waive LASs obligation to remove all the redundant plant. Sita is also seeking a ruling that any benefit obtained by LAS Waste from use, sale, or exploitation of the redundant plant was incidental, and not a contracted benefit. According to the High Court writ, Dorset County Council asked Sita to remove recycling plant and equipment from its materials recycling facility at Hurn in 2005, so the site could be refurbished. Sita said it sought estimates from LAS for removal and disposal of the redundant plant, and agreed to pay £5,000 for this. LAS allegedly planned to use some or all of the plant in its own recycling facility. It is also stated in the writ that LAS removed some of the plant, before the council told Sita that the refurbishment work could be delayed until April 2006, and in turn Sita passed that information on to LASs Mark Saunders. Saunders replied that because of delays, it would have to put the first stage of the plant and equipment into temporary storage, costing £600 for craneage, £300 for transport, and £100 a week for storage. Sita says it paid two invoices, for £1,800 and £1,700, before discovering that the councils refurbishment scheme was not likely to go ahead until autumn 2006. But in April 2006, LAS said there were two ways of resolving the dispute amicably, either that it would accept the delayed timescale and would charge £1000 a week for storage from May 1 until the end of the year, or that Sita could pay a £350,000.contract termination fee. LAS accused Sita of committing a repudiatory breach of contract by failing to deliver the rest of the plant, causing substantial losses, and wrote terminating the contract on July 6 2006, the writ says. In June, LAS had written saying Sita was obliged to make the plant available, and that its commercial value was £500,000. Sita denies that it is under any obligation to make the rest of the plant available, and denies that it is in breach of contract.

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