Akcome Power Pty Ltd v Eid

[2023] NSWCATCD 53

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Akcome Power Pty Ltd v Eid [2023] NSWCATCD 53

Hearing dates:

18 April 2023

Date of orders:

28 April 2023

Decision date:

28 April 2023

Jurisdiction:

Consumer and Commercial Division

Before:

P Moran, Senior Member

Decision:

Determination of Application declined.

Catchwords:

CONSUMER CLAIM - whether consumer claim - jurisdiction

BUILDING CLAIM - whether building claim - whether building goods or services - whether residential building work - jurisdiction

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Fair Trading Act 1987 (NSW)

Home Building Act 1989 (NSW)

Category:

Principal judgment

Parties:

Applicant: Akcome Power Pty Limited

Respondent: Nizar Eid

Representation:

Applicant: P Page - Power Purchase Agreement Management

Respondent: self represented

File Number(s):

GEN 23/05241

Publication restriction:

Nil

REASONS FOR DECISION

Background

1. The applicant and the respondent entered into a Power Purchase Agreement (hereafter PPA) on 9 April 2021 whereby the applicant would install, operate and maintain a solar power system at residential premises in Auburn owned by the respondent.

2. The applicant contends that the respondent has breached the agreement resulting in its termination.

3. By Consumer Claim Application About Goods and Services lodged by the applicant on 20 September 2022, the applicant seeks an amount of $16,117.20. In describing in the Application the "... problem or defect with the goods or services" the applicant refers to entering into a 10 year PPA with the respondent for the purchase of solar electricity. It says that apart from the first invoice in October 2021 the respondent has not paid any further amounts.

Dismissal and Reinstatement

4. The 20 September 2022 Application, being Tribunal matter GEN 22/43171, came before Member Kennedy on 27 January 2023. On that occasion the Tribunal ordered that the Application be dismissed as there was no appearance by the applicant, nor any satisfactory explanation for the non‑attendance.

5. Following the dismissal the applicant filed on 27 January 2023 an Application to Reinstate Proceedings. That Application is Tribunal matter GEN 23/04735. The Application to Reinstate came before me on 18 April 2023. For reasons given ex-tempore on that day the applicant's proceedings were reinstated pursuant to section 55(2) of the Civil and Administrative Tribunal Act 2013 (NSW); the reinstated proceedings being Tribunal matter GEN 23/05241.

Issues

6. From the documents and oral evidence relied upon by each of the parties, and the submissions made at the 18 April 2023 hearing, the issues for determination are:

1. whether the Application a consumer claim as defined by section 79E of the Fair Trading Act 1987 (NSW) (FT Act) such as to give the Tribunal jurisdiction to determine it pursuant to section 79J of that Act;

2. whether the Application is a building claim as defined by section 48A of the Home Building Act 1989 (NSW) (HB Act) such as to give the Tribunal jurisdiction to determine it pursuant to section 48K of that Act.

Evidence

7. The applicant's documents admitted into evidence are marked Exhibit A1. The respondent's documents submitted into evidence are marked Exhibit R1.

8. In addition to the documentary evidence Mr Page, the applicant's Power Purchase Agreement Manager, gave evidence as did the respondent.

Building Claim

9. Commencing at page 5 of Exhibit A1 is the PPA between the applicant and the respondent. It is dated 9 April 2021. It opens with a promise by the applicant to "... install, operate and maintain the Solar Power System ..." at the respondent's premises. By the second paragraph the applicant agrees to "... sell electricity supplied by the Solar Power System ..." to the respondent. In the second sentence of that paragraph it is stated that the agreement is not one of selling or leasing the Solar Power System (SPS); rather, it is an agreement to sell electricity supplied by the System.

10. The agreement further provides that the applicant will maintain the SPS.

11. The term of the agreement is stated to be 10 years from the Commencement Date, defined in the agreement at page 11 of the Exhibit as the date following satisfaction of Conditions Precedent being:

1. that the Installation Works were complete;

2. the distribution network authority had approved operation of the SPS; and

3. the SPS was switched on and generating solar power.

12. Clause 5.5 states the respondent's obligations not to interfere with the SPS.

13. By clause 5.6 the applicant maintains the system. The respondent agrees to give access for installation and maintenance per clause 7.1.

14. By clause 10 the respondent was able to elect, after the commencement of the agreement, to purchase the SPS by giving 30 days' written notice. On that occurring, the applicant - per clause 10.2 - would invoice what is described as the Termination Amount. The clause then sets out how that amount would be calculated. Upon payment of that calculated amount by the respondent to the applicant clause 10.5(a) provided that the legal and beneficial ownership of the SPS would transfer from the applicant to the respondent. Until that point however ie up until that occasion of purchase, clause 8 provided that "title and interest" in the SPS remained with the applicant.

15. Clause 9 provided for the submission of quarterly invoices and clause 11.4 permitted the applicant to terminate the agreement in the event of, inter alia, non‑payment of an invoice by the respondent. Per clause 11.6, in the event of termination by the applicant the respondent had the ability to elect to:

1. require the applicant to remove (at the respondent's cost) the SPS; or

2. to purchase the SPS pursuant to a formula set out in clause 10.

16. The respondent executed on 9 April 2021 a landlord installation consent letter by which he authorised the applicant to install the SPS at his premises. By that document the respondent expressly agreed that the applicant owned and had title over the SPS.

17. At the same time the respondent also executed for the applicant's benefit a direct debit request authorising ANZ Bank to make the invoice payments. On 15 July 2021 the applicant wrote to the respondent welcoming him as a "new Evergreen Solar Solution customer".

18. Page 25 of Exhibit A1 is a record of $405.89 having been received by the applicant, and page 26 records invoices dated January and April 2022 in the total amount of $621.28 remaining unpaid. The applicant enquired as to payment of the outstanding invoice in an email to the respondent of 7 February 2022. On 13 June 2022 (page 29 of the Exhibit) the applicant terminated the PPA for non-payment of instalment invoices.

19. Appearing at page 34 of the Exhibit is a further email of the applicant to the respondent referring to the termination of the PPA and stating that in accordance with clause 19.3 of the agreement an invoice was attached for the respondent's purchase of the system which, it said in the email, represented the applicant's loss. That invoice appears at page 36 of the Exhibit and is in the amount claimed in the Application namely $16,117.20. There are no substantial details recorded as to how the figure was arrived at other than the words "solar system buyout".

20. Clause 19.3 obliged the respondent to indemnify the applicant against reasonable loss or damage suffered as a result of breach of the agreement. Clause 11.6 provided that if the agreement was terminated in accordance with clause 11.4 for, inter alia, non-compliance with an obligation one of the two options - as indicated above - was for the respondent to purchase the SPS pursuant to clause 10. Clause 10 set out a calculation for what is described as a Termination Amount. Clause 10.3 provided:

"We must calculate the Termination Amount based on the Full System Value minus that amount equal to 10% of the Full System Value for each Contract Year up until and including the current contract year (to reflect depreciation)."

21. Clause 10.4 provided that for the purpose of clause 10.3 the Full System Value was calculated based on a rate of $1.20 per watt plus GST.

22. At page 41 of the Exhibit is an email of the respondent to the applicant responding to the applicant's demand letters and concluding with "If you want your solar system, come and remove it".

23. Commencing at page 1 of Exhibit R1 is what the Tribunal takes to be a statement of the respondent dated 20 November 2022. In it the respondent refers to being approached by a salesman of the applicant on 9 April 2021, the subsequent installation of the solar system but a contention that he had been misled as to the discounts that he would enjoy for his electrical power. He also says that he had not been informed about the duration of the contract.

24. The respondent maintains that following installation of the SPS he has not enjoyed the discounts that he contends were promised to him by the applicant. His documents include his electricity accounts prior to and after installation of the applicant's SPS, the invoices received from the applicant following installation, and quotations from other organisations as to the value of the system installed.

25. When giving evidence at the hearing Mr Page for the applicant confirmed that the system was installed at the respondent's premises on 29 June 2021; that the first invoice sent to the respondent was paid by him but that subsequent invoices were not and that - following on from this - there was a series of email communications between the applicant and the respondent concerning non‑payment of the invoices. The applicant eventually terminated the PPA relying upon such non-payment. It contends that the cost of the solar system as installed is the amount claimed of $16,117.20.

26. The respondent when giving evidence at the hearing said that when he spoke to the applicant's sales person that person indicated that the system could be installed at the respondent's premises at a zero cost to the respondent; further, a guaranteed saving of 30% on the respondent's then current energy supplier. The respondent concedes that he agreed to enter into the arrangement and that he signed the PPA.

27. On receipt of the applicants first tax invoice the respondent says that he queried the amount and emphasised the earlier promise of the 30% discount. It was at that point that the respondent realised, he says, that he had in fact signed an agreement for a 10 year period. He then cancelled the direct debit authorisation. He says that he did not see any 30% discount. He concedes that he received the letter from the applicant terminating the agreement and the applicant's demand for the amount claimed in the present application. At that point the respondent arranged for two quotations to be supplied (copies of which are in Exhibit R1) as to the value of the equipment installed.

28. By s48K of the HB Act the Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with Part 3A of the Act.

29. Building claim is defined in s48A to mean (relevantly for present purposes) the payment of a specified sum of money that arises from a supply of building goods or services.

30. The same section defines building goods or services to mean:

"... goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services:

(a)   supplied by the person who contracts to do, or otherwise does, that work or

(b)   supplied in any circumstances prescribed by the regulations to the person who contracts to do that work."

31. Section 48A also provides that goods, services and supply have the same meaning as in Part 6A of the FT Act. Section 79G of the FT Act provides that for the purposes of Part 6A of that act a reference to supply of goods includes a reference to, relevantly, supplying goods by way of sale, exchange, lease, hire or hire purchase.

32. Section 2 of Schedule 1 of the HB Act defines residential building work to mean - relevantly for the purposes of the present Application - the making of alternations or additions to a dwelling.

33. Section 2(iii) of the Schedule specifies what is excluded from the definition of residential building work. Relevantly for present purposes what is excluded is:

"Any work (other than specialist work) the reasonable market cost of the labour and materials involved in which does not exceed the amount prescribed by the regulations."

34. Here the prescribed amount is $5,000. There is no evidence produced as to whether the reasonable market cost of the labour and materials supplied by the applicant exceeded $5,000.

35. Specialist work is defined in clause 1 but does not include the installation of solar panels.

36. When making procedural orders in the original proceedings GEN 22/43171 the Tribunal on 31 October 2022 noted that the applicant was seeking to recover a debut under a contract for the supply of power to the respondent following the installation of solar panels. It was ordered that the applicant's documents, when lodged and served, were to include a written submission setting out how the applicant says the Tribunal has jurisdiction to determine the claim, including by reference to the relevant provisions of the HB Act replied upon.

37. At page 42 of the Exhibit A1 the applicant, in response to the 31 October order, submits that its claim falls into the category of "goods and services provided" per s48A of the HB Act "... by way of installation of the solar panels". It further submits that it was performing specialist work per s2 of Schedule 1.

38. Neither in the documents that he relies on, nor at the hearing, does the respondent provide the submissions ordered.

39. I find that the applicant did, pursuant to the PPA, install an SPS at the respondent's premises. Title to the system however remained with the applicant; the respondent having an entitlement to purchase the system if he wished to do so by utilising the provisions of clause 10 of the agreement.

40. The applicant did not, I find, supply building goods to the respondent. The SPS was, pursuant to the PPA, installed by the applicant at the respondent's premises, and in circumstances where such installation was with the respondent's consent. Ownership and title of the system, being the goods installed or affixed to the respondent's premises, expressly remained with the applicant. The evidence does not indicate that the component parts of the SPS, or the SPS when viewed as a whole, were or was sold, exchanged, leased, hired or provided by way of hire purchase. The goods were not thereby supplied as defined in section 79G of the FT Act. What has occurred, I find, is an owner of premises, being the respondent, permitting - pursuant to an agreement - the applicant to instal its solar panels onto the roof of his premises to facilitate the operation of the agreement between the parties for the supply of electrical power - via the use of the system - to him. The goods installed did not become goods of the respondent. The respondent had a contractual entitlement to purchase the goods but the evidence clearly indicates that he did not do so. The agreement also provided a mechanism whereby, if the respondent elected not to purchase the system, his remaining option (per clause 11.6(a) of the agreement) was to "require" the applicant to remove the SPS. The applicant has not expressly elected pursuant to clause 11.6. In his email to the applicant of 24 August 2022 (appearing at page 41 of Exhibit A1) he invites the applicant to remove the system if it wanted it. There is no evidence as to whether the applicant has removed the system following delivery of that email.

41. To enable the Tribunal to have jurisdiction to determine the Application it is necessary, per s48A of the HB Act, that the claim of the applicant for the payment of the amount of money that it seeks arises from a supply of building goods or services supplied for or in connection with the carrying out of residential building work. On the evidence presented I am not satisfied that what was supplied by the applicant was building goods or services supplied for or in connection with the carrying out of residential building work. It was not work involved in the construction, repairing, renovating, decoration or protective treatment of the respondent's dwelling such as to enliven subsections (1)(a) or (1)(c) of section 2 of Schedule 1.

42. It was not, I find, the making of alterations or additions to the respondent's dwelling, as the installation of the system was contractually agreed to be for a period not exceeding 10 years, and not in circumstances where what was installed was by way of permanent alteration or addition. It was the affixing of the applicant's products - to which it retained title and ownership - for a limited contractual period.

43. The installation of the SPS was not, I find, specialist work as that phrase is defined in s1 of Schedule 1.

44. As the applicant's claim is not, I find, a building claim as defined by s48A, the Tribunal has no jurisdiction to determine it per s48K.

Consumer Claim

45. The initial application filed in GEN 23/05241 in September 2022 was a Consumer Claim Application About Goods and Services. That Application, by its provisions, applies to applications where orders are sought under Part 6A of the FT Act.

46. In its submissions lodged with the Tribunal on 18 November 2022 (page 42 of Exhibit A1) the applicant specifically referred, in addition to a building claim under the HB Act, to the Tribunal having jurisdiction to hear "claims through the Fair Trading Act 1987". It specifically referred to the definition of services under s79F. It referred to subsections (1)(a) and (1)(b) of s79F in the definition of "services" as including the performance of work (including work of a professional nature) whether with or without the supply of goods, and the provision of gas or electricity or the provision of any other form of energy. It does not make any further submission as to how these provisions assist it.

47. There is no evidence that the work performed, whether of a professional nature or otherwise, nor as to the provision of gas or electricity or any other form of energy, was performed by the applicant as a consumer. Section 79E of the FT Act confines a consumer claim to mean a claim by a consumer. The same definition requires that the claim arise from the supply of goods or services to the applicant as consumer. Here the applicant was the supplier. It was not a consumer.

48. As the applicant was not a consumer of goods or services the Application that it makes is not a consumer claim within the definition prescribed by s79E of the FT Act. Accordingly, as its claim is not a consumer claim under Part 6A of that Act the Tribunal, per s79J, has no jurisdiction to determine it.

Orders

49. The Tribunal has no jurisdiction to determine the Application.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Amendments

15 August 2023 - Formatting amendments.

Decision last updated: 15 August 2023