Odeon Arcade Limited v Smartestenegy Business Limited

Under paragraph 3(1) of Schedule 6 to the Electricity Act 1989, a deemed contract ordinarily arises between the supplier and the occupier or occupiers of the premises supplied. The owner becomes liable only where the relevant premises are unoccupied. “Premises” does not mean the whole property owned by a freeholder where separate units are occupied by different tenants. A supplier’s use of one meter, and its statutory power to disconnect for non-payment, does not justify imposing liability on the owner merely because no one occupier uses the whole building.

Odeon Arcade Limited, the freehold owner of commercial premises divided into units, applied to restrain advertisement of a winding-up petition presented by Smartestenegy Business Limited for unpaid electricity charges. The charges related to three units supplied through one meter, each occupied by commercial tenants during the relevant period.

The principal issue was whether paragraph 3(1) of Schedule 6 to the Electricity Act 1989 deemed a contract with the freeholder because no single tenant occupied the whole premises. The court also considered alleged defects in apportionment, metering, contracting, and demands for payment.

1. Disposition. The company succeeded on the construction issue. The injunction restraining advertisement of the petition was granted and the petition was to be dismissed.
2. Applying the substantial-dispute principles stated in Angel Group Limited v British Gas Trading Ltd [2012] EWHC 2702 (Ch), the court could determine the discrete statutory construction question in the same manner as a short point of law on a summary judgment application, following ICI Chemicals v TTE Training Ltd [2007] EWCA Civ 725.
3. Paragraph 3(1) of Schedule 6 to the Electricity Act 1989 primarily deems a contract between the supplier and the occupier or occupiers of the premises supplied. The reference to “premises” concerns the premises occupied by the relevant occupier, not the entirety of the freehold property. The statutory reference to “occupier” is capable of applying to occupiers in the plural.
4. The owner is liable under the deeming provision only if the relevant premises are unoccupied. The fact that several tenants occupy separate units, and that one meter supplies those units, does not create a fiction that the premises are unoccupied or make the freeholder liable.
5. The supplier’s power under paragraph 2(1) of Schedule 6 to disconnect premises for non-payment did not produce an absurd or unfair result on this construction. The supplier had exercised that power after the electricity charges remained unpaid.
6. The remaining objections were dealt with briefly and would not have established a substantial dispute: failure to apportion charges for common areas, alleged uncertainty about the meter, the alleged contract with Karwan, and defects in the invoices. Those findings were unnecessary to the outcome.