CH-2025-000101 - [2025] EWHC 2975 (Ch)

SBL’s case on appeal is, in essence, as follows.

In submissions, Mr MacLachlan, on behalf of SBL, placed great emphasis upon the purpose behind the statutory deeming provision in paragraph 3(1) of Schedule 6 to the 1989 Act. He submitted that it was a provision that was designed to achieve certainty in the situation where electricity was being supplied to premises where there was no contract in place between the supplier and the user of the electricity supplied. He submitted that the imposition of a deemed contract in this situation was of benefit to the customer in that it gave the customer the assurance of a continuation of supply, and of benefit to the supplier in that it provided a legal basis for recovering payment for the supply of electricity without having to rely upon some form of quantum meruit.

As to the purpose behind the relevant provision, reference was made to an extract from a final report entitled “Deemed Contracts” produced in c. June 2006, by Ofgem’s Duty to Supply, Contracts and Information workgroup, where, under the heading “Deemed Contracts” it was said:

“The group notes that deemed contracts play a vital role in the energy market. The nature of supply is such that it would be inefficient, given current metering technology, to disconnect premises when a customer had moved out and reconnect the premises upon application for a contract by a new occupant. In addition, suppliers may not always be aware of customer movements until a period of time has elapsed after the event. A deemed contract therefore seeks to provide a sound and binding basis upon which suppliers will supply customers where a contract has not been expressly agreed. It also provides suppliers with a clear basis upon which to charge for that supply.”

Mr MacLachlan submitted that the purpose of achieving certainty in the situation where no contract existed between the supplier of electricity and the consumer was a key consideration that informed how paragraph 3(1) of Schedule 6 ought to be construed.

Mr MacLachlan emphasises the importance of an electricity meter in providing the basis for charging for electricity, pointing to paragraph 1(1) of Schedule 7 to the 1989 Act which provides that:

“(1)

Where a customer of an [authorised supplier] is to be charged for his supply wholly or partly by reference to the quantity of electricity supplied, the supply shall be given through, and the quantity of electricity shall be ascertained by, an appropriate meter.”

On this basis Mr MacLachlan submitted that where one has premises supplied by one meter that are split into units, as in the present case, the reference to “premises” in paragraph 3(1) of Schedule 6 to the 1989 Act must be to the premises as a whole incorporating all the units because the supply must be taken to be to the metered premises, not least because that is the only way to achieve any degree of certainty so far as charging is concerned.

This then raises the question of the meaning of “occupier” in paragraph 3(1). As to this, Mr MacLachlan took me to a number of authorities that show that the word has no fixed meaning in statutory provisions, and will take its meaning from the particular context – see e.g. Cornerstone Telecommunications v Compton Beauchamp [2022] 1 WLR 3360 at [102] per Lady Rose JSC. In this case, at [106], and having referred to the observations of Lord Nicholls in Graysim Holdings Ltd v P & O Property Holdings Ltd [1996] AC 329 at 334-335, and of Lord Mustill in Southern Water Authority v Nature Conservancy Council [1992] 1 WLR 775 at 781, Lady Rose JSC went on to say:

“I respectfully agree, the starting point here is not to try to define the word “occupier” and then allow that definition to mandate how the regime established by the code works. The correct approach is to work out how the regime is intended to work and then consider what meaning should be given to the word “occupier” so as best to achieve that goal.”

Adopting this approach on the present facts, it is submitted on behalf of SBL that the best, and indeed the only effective, way to achieve the objective behind paragraph 3(1) of Schedule 6 to the 1989 Act would be by construing “occupier” as being the occupier, if any, of the whole of the premises served by the relevant meter, and to the extent that there is no such occupier, e.g. because the premises are split into units with different occupiers, then, for the purposes of paragraph 3(1), the premises are to be treated as “unoccupied” so as to impose the deemed contract on the owner, here Odeon.

Mr MacLachlan used as an example to demonstrate his point the example of a townhouse split into a number of rooms or flats that are let out, with only one meter serving the house. He submitted that it would be wholly impractical if anyone apart from the landlord/owner were the party to the relevant deemed contract given the difficulties that would be created if the occupiers of the individual rooms or flats were a party to the relevant deemed contract, either individually or jointly and severally.

On the Judge’s finding, the individual tenants would be subject to a deemed contract relating to their particular room or flat, being the “premises” for the purposes of paragraph 3(1), and they would be responsible for payment of the electricity supplied thereto albeit there was no meter in place to record their usage. The alternative analysis, considered by the Judge in paragraph 16 of the Judgment was that the “premises” are, for the purposes of paragraph 3(1), the entirety of the premises served by the meter, with the individual tenants being jointly and severally liable, perhaps also with the landlord in respect of common parts, for the whole metered supply. Mr MacLachlan submitted that this would, in each case, be a recipe for conflict and unfairness that cannot have been anticipated by the legislation.

In the circumstances, Mr MacLachlan submitted that the only sensible interpretation is that advanced by SBL.

He further submitted that, on proper analysis, there is not as maintained by Mr Shipley on behalf of Odeon, any inherent inconsistency or difficulty with regard to other provisions of the “Electricity Code” provided for by Schedule 6 to the 1989 Act, or with other provisions of the 1989 Act, including those where the same phraseology, “the occupier (or the owner if the premises are unoccupied)”, is used.

One particular example relied upon by Mr Shipley on behalf of Odeon is paragraph 2 of Schedule 6, where, pursuant to paragraph 2(1), it is provided that the supplier may install a prepayment meter, or disconnect the premises, for non-payment. Paragraph 2(2)(a) provides that before any such action is taken, then 7 working days’ notice prior is to be given to “the occupier of the premises (or the owner of the premises if they are unoccupied)”. Mr Shipley’s point is that one would expect the legislation to provide for notice to be given to the actual occupier being the party most obviously affected by any disconnection, rather than the owner. Mr MacLachlan submits that there is no inherent problem with notice being given to the landlord owner, and he points out the difficulty of disconnection if not related to the whole of the premises supplied by the relevant meter.