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

The Judge rejected SPL’s interpretation of paragraph 3(1) of Schedule 6 and held that the reference therein to “premises” related to the units/premises which were occupied by the respective individual occupying tenants. As she put it in paragraph 19 of the Judgment:

“The clause (sic) operates primarily to deem a contract between the supplier and the occupiers or occupier of premises. Premises here, in my judgment, relates to the premises which are occupied by the relevant occupier. There is no justification to seek to read premises as having to relate to the entire premises over which an owner is the freeholder. Under the terms of the paragraph, the owner is only liable under a deemed contract if the premises are unoccupied.”

Consequently, the Judge found that as the premises were not “unoccupied, Odean could not be the party subject to the deemed contract and liable to pay for the supply of electricity. The Judge considered that this accorded with the natural meaning of the words used in paragraph 3(1) of Schedule 6, and the overall purpose behind the relevant statutory provisions.

It is helpful to consider how the Judge dealt, at paragraphs 16 to 18 of the Judgment, with a number of arguments advanced before her by Mr MacLachlan on behalf of SBL, before she concluded as she did in paragraph 19 of the Judgment.

At paragraph 16, the Judge said this:

“16

Mr MacLachlan submits that this construction is supported by certain canons of construction. He submits that an alternative interpretation that all tenants are liable produces absurd or unworkable results. He submits that this could not have been Parliament’s intention that occupants of one unit which is part of the ‘premises’ would be liable for the supply to other units which form part of the entire premises. In my judgment, this unfairness only really exists in so far as ‘premises’ in paragraph 3(1) refers to the entire premises. If the reference to premises is only to the premises which are the subject matter of the lease and the tenant’s occupation, the unfairness asserted would not arise.”

I believe that the point that the Judge is making at the end of paragraph 16 is that whilst unfairness might arise from tenants of the respective units being treated as jointly and severally liable for the supply of electricity to the premises as a whole covered by a particular meter, the unfairness does not arise if “premises” for the purposes of paragraph 3(1) is interpreted as meaning the particular premises occupied by the individual tenant, i.e. their particular unit.

The Judge went on in paragraphs 17 and 18 to say:

“17.

Secondly, Mr MacLachlan submits that the interpretation of all the tenants being liable for the electricity supply to the entire premises cannot be reconciled with the supplier’s statutory right to ‘disconnect the premises’ where the customer has not, within the requisite period, made all the relevant payments. This arises pursuant to paragraph 2(1) of Schedule 6. He submits that the construction that all the tenants are liable for the electricity charges would mean that if part of a bill remains unpaid, then even those who have paid their share would be disconnected. He submits this is an absurd outcome. In my judgment, this point again depends upon the construction of ‘premises’ being a reference to the entire premises. As with the earlier point, Mr MacLachlan’s construction strains the natural language used in paragraph 3(1) which refers to premises and not to entire premises. It is agreed by the parties that in accordance with the Interpretation Act 1978 the singular refers also to the plural so the provision is to be read as referring to occupier or occupiers. This therefore means that paragraph 3(1) envisages occupiers of premises. Moreover, the ability of the Creditor to disconnect when the bill has not been paid is exactly what occurred in this case. It does not lead to an unfair outcome, but allows the Creditor to disconnect due to non-payment of the electricity charges to the premises. That is what has occurred in this case.

18.

The Creditor submits that the purpose of the deeming provision is to address an inefficiency in the energy market which would arise if suppliers have to formally contract with new occupants of buildings every time a building gained a new occupant. There would be a wait before a new occupant could be guaranteed a supply of electricity because of having to wait for a contract with a supplier. I am not persuaded that the mischief is to promote market efficiency or importantly, that the more natural construction which the Creditor argues against in some way fails to promote market efficiency. Mr MacLachlan did not provide any real justification to support his purpose and mischief argument as in some way meaning that deeming was necessary in all cases and that a failure to be able to deem in certain cases was against the purpose of the provision. In certain cases deeming may not be appropriate and the supplier would seek to negotiate express contracts. The provision enables contacts to be deemed in certain circumstances which can assist both the supplier and also the occupier, but this will depend on the factual circumstances. In every case, it seems to me, actual contracts can be entered into by way of an alternative. Meters could be installed to the separate units. In this particular case, as the outstanding electricity bill which covered separate units has not been paid for a considerable period of time, the supply was disconnected. It is no part of the Creditor’s case that in some way it is not possible to install separate meters.”