SEATTLE (Scrap Monster): City of Edinburgh Council has lost one round of a legal battle with waste contractor Dalton Group over how damages should be assessed.
As a Court of Sessions hearing before Lord Harrower, the council argued that since it could have terminated Dalton’s contract at any time with three months' notice, any damages awarded for it having ended the contract early should be limited to this period.
Dalton had a contract to sell scrap metal collected at Edinburgh’s recycling centres.
A dispute arose in 2018 over contamination of the scrap and Edinburgh began processing this through another firm.
Dalton argued Edinburgh wrongfully repudiated the contract and sought to recover as damages the profit it would have gained over the rest of the contract term.
Edinburgh though said these should cover only three months’ of payments since it could have given notice at any point.
Lord Harrower said the contract had never been ended - whether lawfully or unlawfully - and that anyone faced with a repudiatory breach of contract such as this “is entitled to elect to treat the contract as remaining in force”.
Dalton offered to prove at a later hearing that it did not accept Edinburgh’s repudiatory breach.
“For the purposes of this debate, therefore, it must be assumed that the contract remained in force and that [Dalton] remained ready and willing to receive the [council’s] scrap metal waste, by maintaining the necessary equipment and capacity at its scrap metal sites,” Lord Harrower said.
He said Edinburgh could have exercised its three-months’ notice power but chose not to and so Dalton was entitled to reject Edinburgh’s claim start only three months’ worth of damages were in question.
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