The Palms Resort Limited v P.P.C. Limited (Turks and Caicos Islands)

Where an electricity tariff classifies premises by annual consumption but billing is monthly, a retrospective rolling assessment cannot be used during the consumer’s first 12 months. The annual calculation must relate to a year during which the consumer was supplied by the public supplier. Charges during that first year must therefore be provisional, with an adjustment once consumption establishes the applicable category.

After a consumer has been supplied for at least 12 months, a rolling assessment looking back over the preceding year may be appropriate. The precise month in which a change of category takes effect was left open.

The appellant operated a hotel and was supplied with electricity by the respondent, a public supplier. The Electricity Rates and Charges Regulations (Providenciales), as amended in 2000, classified premises by annual consumption and prescribed different maximum rates for small commercial premises, medium hotels and large hotels.

The supplier charged the hotel retrospectively at the lower rate when its consumption crossed the relevant thresholds. The Supreme Court, in a judgment delivered by Gordon Ward CJ on 28 April 2008, found for the appellant. The Court of Appeal of the Turks and Caicos Islands reversed that decision. The central issue before the Privy Council was whether charges during the hotel’s first year could be assessed retrospectively or had to be provisionally charged and later adjusted.

1. Disposition. The appeal was allowed. The Court of Appeal’s judgment was set aside and the judgment of the Chief Justice was restored.
2. The Electricity Ordinance required electricity supplied by a public supplier to be charged in accordance with tariff rates prescribed by regulations. The supplier’s licence also required monthly billing. The monthly meter reading therefore had to be reconciled with tariff categories defined by annual consumption.
3. The Board accepted that, once a hotel had consumed electricity for at least 12 months, a rolling assessment referring to the preceding 12 months was consistent with the Regulations. The Board did not decide whether a change of category should affect the month in which the threshold was crossed or the following month.
4. That retrospective approach could not be used during the first 12 months of the hotel’s supply. It was implicit in assessing status by annual consumption that the relevant year had to be one during which the consumer was a customer of the supplier. During the first year no completed qualifying year existed. Billing therefore had to proceed provisionally, followed by an adjustment once the first year’s consumption established the applicable category.
5. Unless written submissions were made within 28 days, the supplier was to pay the Resort’s costs before the Board and below.

• Privy Council: Allowed the appeal under [2010] UKPC 30, set aside the Court of Appeal’s judgment and restored the judgment of Gordon Ward CJ.
• Court of Appeal of the Turks and Caicos Islands: Reversed the Supreme Court’s decision.
• Supreme Court of the Turks and Caicos Islands: Gordon Ward CJ found in favour of the Resort on 28 April 2008.