Design Joinery & Doors Pty Ltd v IPower Pty Ltd - [2015] SASC 93

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
DESIGN JOINERY & DOORS PTY LTD v IPOWER PTY LTD & ANOR
[2015] SASC 93
Judgment of The Honourable Justice Blue
26 June 2015
RESTITUTION - GENERAL PRINCIPLES
EVIDENCE - COURSE OF EVIDENCE AND ADDRESSES - COURSE OF EVIDENCE - REOPENING CASE AND RECALLING WITNESSES - BY PARTIES
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - ACCEPTANCE - GENERALLY - LEGAL PRINCIPLES
Magistrates appeal by defendant against judgment for plaintiffs for price of electricity.
In March 2010, the plaintiffs' telemarketer spoke to the defendant's director about changing its electricity retailer. The plaintiffs sent to the defendant a welcome pack including standard terms applicable to small customers although the defendant was not a small customer.
In April 2010, the plaintiffs became registered as the retailer responsible in the electricity wholesale market to pay for electricity supplied to the defendant's premises. Shortly thereafter, the defendant sent a letter to the plaintiffs requesting termination of the energy contract but the letter was not acted upon. The plaintiffs remained the registered retailer until July 2011.
The Magistrate held that an oral contract came into existence between the parties that incorporated the plaintiffs' standard written terms for supply to small customers, which in turn incorporated their standard written terms for large customers specifying a pricing formula for supply after notice of termination. The Magistrate permitted the plaintiffs to reopen their case to prove their standard terms for large customers and application of the pricing formula.
Held:
1.       No error has been demonstrated in the exercise of the Magistrate's discretion to permit the plaintiffs to reopen their case (at [61]-[62]).
2.       The Magistrate erred in finding the existence of an oral contract between the parties (at [75]-[80]).
3.       The electricity was supplied by the plaintiffs to the defendant pursuant to an oral request and the defendant is liable to pay the fair and reasonable value of the electricity supplied (at [90]-[102]).
4.       On the evidence adduced at trial, the fair and reasonable value of the electricity supplied was $55,184 inclusive of GST (at [113]).
5.       Appeal allowed. Judgment set aside. In lieu thereof, judgment entered for the plaintiffs against the defendant for $55,184 with the parties to be heard as to interest and costs (at [121]-[122]).
Electricity Act 1996 (SA) s 4(1); Electricity (General) Regulations 1997 (SA) reg 4B, 7D, 7E(b), 7F(3)(a), referred to.
Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635, discussed.
House v The King (1936) 55 CLR 499; Masters v Cameron (1954) 91 CLR 353; Pavey & Matthews Proprietary Limited v Paul (1987) 162 CLR 221; Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141, considered.

DESIGN JOINERY & DOORS PTY LTD v IPOWER PTY LTD & ANOR
[2015] SASC 93
Magistrates Appeal (Civil):
BLUE J:

This is an appeal by the defendant against judgment by a Magistrate in favour of the plaintiffs for $74,437.77 plus interest as the contract price for the supply of electricity.
In March 2010, there was a telephone conversation between the plaintiffs’ telemarketer and the defendant’s director on the topic of the defendant changing its electricity retailer from AGL to the plaintiffs and entering into a contract with the plaintiffs for the supply of electricity. The plaintiffs sent to the defendant a welcome pack that included standard terms applicable to small customers. The defendant was not in fact a small customer.
In April 2010, the plaintiffs became registered in place of AGL as the retailer responsible in the wholesale market to pay for electricity supplied by the market to the defendant’s premises. Soon thereafter, the defendant sent a letter to the plaintiffs saying it wished to terminate the energy contract with the plaintiffs and cancel any requests to transfer responsibility for the supply address.
In July 2011, AGL resumed responsibility for the supply of electricity to the defendant’s premises. In the meantime, apart from one isolated invoice from AGL, neither the plaintiffs nor AGL issued any invoices to the defendant for the supply of electricity.
The Magistrate held that an oral contract came into existence between the parties in March 2010 that incorporated the plaintiffs’ standard written terms for supply of electricity to small customers, which because the defendant was in fact a large customer in turn incorporated the plaintiffs’ standard written terms for supply of electricity to large customers, which in turn specified a pricing formula for the supply of electricity after notice of termination. The Magistrate permitted the plaintiffs to reopen their case after initially reserving judgment to prove their standard terms for supply of electricity to large customers and application of the pricing formula therein.
The defendant appeals against the judgment on essentially two grounds. First, the Magistrate erred in concluding that a contract came into existence incorporating the plaintiffs’ standard written terms and that those terms had application in the circumstances. Secondly, the Magistrate erred in permitting the plaintiffs to reopen their case.
The plaintiffs support the judgment on the ground decided by the Magistrate. They also advance an alternative contention that, if they fail in contract, they were entitled to judgment in the same amount in restitution.
The appeal raises three broad issues:
1.Did the plaintiffs prove the existence of an oral contract entered into in March 2010 incorporating their standard written terms as found by the Magistrate and did those terms have the effect found by the Magistrate?
2.Were the plaintiffs entitled to payment for electricity supplied to the defendant’s premises by way of restitution?
3.Did the Magistrate err in permitting the plaintiffs to reopen their case?
Background
The defendant Design Joinery & Doors Pty Ltd carries on a joinery business. Between 2010 and 2013, it conducted its business at premises at Salisbury North. Paul Maddeford was a director.
The plaintiffs IPower Pty Ltd and IPower 2 Pty Ltd carry on business jointly as an electricity retailer trading as Simply Energy (Simply Energy).
The national electricity market is governed by the National Electricity Rules[1] (the Rules) made by the Australian Energy Market Operator (AEMO) under the National Electricity Law which is a schedule to the National Electricity (South Australia) Act 1996 (SA). The market participants are generators, network service providers (transmitters and distributors) and customers.[2] Market customers include retailers such as AGL and Simply Energy. A database is maintained by AEMO known as the Market Settlement and Transfer Solution (MSATS) system to record inter alia the identity of the retailer (or other customer) in respect of each electricity meter from time to time.
[1] Exhibit P8.
[2] National Electricity Rules clause 2.4.1.
The retailer registered in respect of an electricity meter is liable to pay the applicable regional reference node half hourly spot price per megawatt hour[3] for electricity supplied through the meter adjusted by the applicable transmission loss factor (marginal loss factor) and distribution loss factor.[4] The registered retailer is also liable to pay a network charge for the use of the transmission and distribution networks to supply electricity from generator to customer.[5] This charge is calculated at fixed rates per megawatt hour for peak electricity usage in blocks per month, a fixed rate per megawatt hour for off-peak electricity usage and a daily supply charge.
[3]    National Electricity Rules clauses 3.4, 3.9, 3.15.
[4]    National Electricity Rules clause 3.6.
[5]    National Electricity Rules clauses 6.18-6.20.
The registered retailer is also liable to pay a charge to the metering service provider for metering services[6] and a charge to AEMO for its services.[7]
[6] National Electricity Rules clause 7.3.6.
[7] National Electricity Rules clause 2.11.
The Electricity Act 1996 (SA) distinguishes between small customers and other customers (large customers). A small customer is defined to be a customer with an annual electricity consumption less than the number of megawatt hours per year specified by regulation.[8] In 2010, the megawatt hours per year specified for this purpose was 160.[9] The Essential Services Commission is empowered to regulate prices for the supply of electricity to small customers. Retailers are required if requested to supply electricity to small customers on published standing contract terms and conditions and for published standing contract prices.[10] Otherwise, customers can if they wish enter into contracts on negotiated terms known as market contracts.[11]
[8] Electricity Act 1996 (SA) s 4(1).
[9] Electricity (General) Regulations 1997 (SA) reg 4B.
[10] Electricity Act 1996 (SA) ss 35A, 36-36AB.
[11] Electricity (General) Regulations 1997 (SA) reg 7D, 7E(b), 7F(3)(a).
Simply Energy made a fundamental distinction between small customers and large customers in its dealings with customers and in its contractual documentation.
For small customers, Simply Energy charged a simple rate per kilowatt hour for electricity used together with a daily service charge. There was one rate for off-peak electricity regardless of the amount and four rates for peak electricity depending on the incremental amount. There was also a daily service charge. The contract documentation comprised a contract sheet (contract sheet) setting out rates, term of the contract and other variables together with a set of standard terms (the small customer standard terms). Simply Energy tendered at trial the small customer standard terms but did not tender any version of a contract sheet.
For large customers, Simply Energy’s charges comprised multiple components. One component was a rate per kilowatt hour for peak and a lower rate for off-peak electricity. Another component was a rate per kilowatt hour MRET charge reflecting the cost of participating in the Mandatory Renewable Energy Target (MRET) scheme. Another component was a daily service charge. In addition, Simply Energy charged the customer on a pass through basis for network charges set by network service providers for distributing electricity; market charges including service fees imposed by AEMO; and metering charges imposed by metering service providers. The contract documentation comprised a Quote for Supply of Electricity (quotation sheet) setting out rates and other variables together with a set of standard terms (the large customer general terms). Simply Energy tendered during the second phase of the trial pro forma versions of this contract documentation.
The small customer standard terms included the following provisions:
1.     Our Contract
1.1     The scope of our contract
These contract terms form part of a contract you have entered into with us for sale of energy to your premises. The other part of the contract is a contract sheet.
1.2     Important obligations on us under the contract
As a retailer selling energy under our retail licences:
a.   we agree to arrange for your distributor to connect your premises to its network, if you ask us…
b.   we agree to arrange for your distributor to supply energy to your premises; and
c.   we agree to sell to you the energy supplied to your premises.
…
2. How and When the Contract Starts and When it Expires
2.1 When the contract starts
The contract starts when you accept our offer to sell energy to you, whether you do this by signing and returning the contract sheet to us before the offer expiry date or by verbally accepting our offer or accepting online.
2.2 Cooling-off
You can cancel the contract without penalty for the first 10 business days after you … receive our disclosure statement. You would have to send us a notice clearly indicating an intention to cancel within the cooling-off period. Both of us then would have to comply with the law in respect of that cancellation.
2.3     When we start selling you energy.
Although the contract may have started, we do not start selling you energy, and you have no obligation to pay us for energy, unless and until:
a.   your cooling-offer period has expired;
b.   your premises are connected to the network; and
c.   if you are transferring to us from another retailer, the meter registered for your premises is effectively allocated by the market and system operator to us…
…
2.5     When the contract expires.
a.     Unless it is terminated earlier under paragraph 9 or 15.2, the contract will continue from when we start selling you energy for the term stated in the contract sheet (or, if no term is stated, indefinitely).
…
3.     Charges
3.1     Energy charges
You must pay us our energy charges.
3.2     Rates
a.     The contract sheet states the initial rates we use to determine our energy     charges. If it states a number of different rates, we will decide as soon as      practicable after the contract starts which rates initially apply. Your first bill will       state the rates that apply.
b.     If the rates stated in the contract sheet are not the rates we generally apply to      customers of your type, in your distribution area, with your meter type and any        other characteristic referred to in the contract sheet, we will notify you as soon as     practicable after we become aware of this and, if we have billed you based on the    stated rates, we will adjust the bill under paragraph 4.5.
…
9.     Early Termination of the Contract
…
9.5     When we stop selling you energy
Despite anything else in these contract terms, early termination of the contract would not be effective until:
…
b.     if the contract is terminated because you are transferring to another retailer, when transfer to the other retailer becomes effective;
...
14.6   Definitions
In these contract terms:
…
contract sheet means either our offer to sell you energy signed by you or, if you verbally accepted our offer or accepted online, the confirmation of acceptance we subsequently provide to you;
…
premises means the premises stated in the contract sheet…
15.     You Must be a Small Customer
15.1   Notice
You must immediately notify us if you are not, or you cease to be, a small customer.
15.2 Possible consequences if you are not a small customer.
If you are not, or you cease to be, a small customer, then we may terminate the contract early by giving you notice and, unless the law disallows this, request your distributor to disconnect your premises.
15.3   Early termination fee
If we terminate the contract under paragraph 15.2 then, unless the law disallows this, you must pay us the early termination fee set out in the contract sheet.
15.4   Basis on which the contract continues.
Until such time as we terminate the contract under paragraph 15.2, the contract will continue, for the term stated in the contract sheet (or, if no term is stated, indefinitely), not on these contract terms (except that paragraph 15.2 and 15.3 will continue to apply) but on the standard contract terms we apply to larger customers (subject to any necessary adaptation), and not on the rates and charges stated in the contract sheet or otherwise applicable to you while you were a small customer but on the standard rates and charges we apply to larger customers. We will give you notice of the new contract terms and rates and charges as soon as practicable after we become aware that you are not, or have ceased to be, a small customer.
The large customer general terms included the following provisions:
1.     What we agree to do
…
1.3     If your supply address is in South Australia, we agree to sell electricity and related services to you.
2.     What you agree to do
You agree to pay us for the electricity we sell and for related services we supply,
…
5.     The effective date
This agreement becomes an effective, legally binding contract on the date it is signed by both us and by you….
7.     The start date
7.1     The start date is the date on and from when we become obliged to sell you electricity under this agreement and you become obliged to pay us for electricity.
7.2     The start date is:
(a)     if you are transferring from another retailer to us, the date your supply address has been transferred to us;
…
10.     Your rates
10.1   Your initial energy rates and MRET rates are included in our quote.
...
21.     The expiry date
Starting from the start date, our agreement continues for the duration specified in the Important Details.
22.     Ongoing arrangements after termination or expiry.
22.1   Before the term expires we may offer to extend the term of this agreement at        rates and on terms detailed in your offer. If you do not enter into another agreement     for the sale or supply of electricity to your supply address before the term expires, you will be taken to have accepted the offer.
22.2   Unless clause 22.1 applies or you and we agree something else, after this     agreement is terminated or expires, if we continue to sell or supply electricity to you, you must buy electricity from us at energy rates equal to the spot price plus    $50 per MWh (or such lesser additional amount in $ per MWh as we may      determine is fair in the circumstances), at an MRET rate equivalent to the prevailing rate of charge applicable under MRET in respect of renewable energy shortfalls and large-scale renewable energy projects and otherwise on terms corresponding to these general terms. You must also pay for all network charges,        market charges and metering charges on a pass through basis and additional        charges contemplated by clause 35 and 36.
As at March 2010, AGL was the retailer supplying electricity to Design Joinery’s premises. Design Joinery used in the vicinity of 20 megawatt hours of electricity per month. It is common ground that Design Joinery used more than 160 megawatt hours of electricity per year and was not a small customer.
AGL issued monthly invoices to Design Joinery. On 9 March 2010, AGL reissued invoices to correct errors in earlier invoices for the months ending 17 December 2009, 18 January 2010 and 18 February 2010. The invoices were in the vicinity of $3,000 to $4,000 per month[12] except over the Christmas–New Year break.
[12] All dollar figures referred to herein are exclusive of GST.
For the component of the charges rendered from 1 January to 31 March 2010, AGL charged 25.13 cents per kilowatt hour for a certain number of initial kilowatt hours and 22.87 cents per kilowatt hour thereafter for peak power. AGL charged 11.65 cents per kilowatt hour for off-peak power. AGL charged 45.4 cents per day as a service charge.
By comparison, AGL’s most recently published standing price for general supply based on time of use and monthly meter readings for 1 January to 31 March 2010 was between 25.89 cents and 24.45 cents per kilowatt hour for peak power and 12.40 cents for off-peak power.[13]
[13] Exhibit P3 South Australian Government Gazette 30 June 2009 page 3066.
On 19 March 2010, a telemarketer engaged by Simply Energy had a telephone conversation with Mr Maddeford.[14] The telemarketer made an offer on behalf of Simply Energy to supply electricity to Design Joinery at certain rates[15] per kilowatt hour for peak and off-peak electricity and per day for service fees with a 9 percent discount off the consumption charges. Mr Maddeford accepted the offer and agreed to change Design Joinery’s electricity retailer from AGL to Simply Energy. The telemarketer told Mr Maddeford that documents would be sent out to Design Joinery and it would have a 10 day cooling off period to cancel, in which case it would remain with its previous retailer.
[14] As appears below, no direct evidence was adduced by Simply Energy of this conversation. The telemarketer was not called to give evidence. Simply Energy relied on a business record being a hubNET record created as a result of input by the telemarketer coupled with evidence of general practice given by the witness Christian Caddaye. Mr Maddeford did not have a specific recollection of the conversation with the telemarketer. The account of the conversation set out here reflects unchallenged findings by the Magistrate and common ground between the parties on appeal.
[15] No evidence was adduced what these rates were.

On approximately 25 March 2010, Simply Energy posted to Design Joinery a “Welcome Pack” applicable to small customers which was received by Design Joinery within a few days. The usual practice was that the welcome pack included a contract sheet setting out rates, term and other variables and the small customer standard terms. Simply Energy did not adduce any direct or indirect evidence of the content of the contract sheet sent to Design Joinery(if any) at either the pro forma or detailed content level. It is not known what rates were quoted by the telemarketer or were included in the contract sheet (if any).
On 15 April 2010, Simply Energy was recorded in place of AGL by AEMO in the MSATS database as the retailer in respect of Design Joinery’s meter. Simply Energy thereby became liable to pay the spot market prices, network charges and other charges in respect of electricity supplied to Design Joinery’s premises.
The change of retailer recorded in the MSATS database resulted in AGL issuing a final invoice on 29 April 2010 to Design Joinery for the period ending on 14 April 2010.
In the meantime, an agent of AGL had telephoned Mr Maddeford with a view to persuading him to revert to AGL rather than remaining with Simply Energy. This resulted in the AGL agent sending to Mr Maddeford a pro forma letter that could be sent by a customer to a competing retailer terminating its contract and cancelling any requests made to transfer responsibility for electricity supply.
On or soon after 20 April 2010, Mr Maddeford sent a letter to Simply Energy’s Transfers Department in the following terms:
I wish to terminate my energy contract with Simply Energy. Please use this letter as my notice to terminate the contract and to cancel any requests made to transfer the responsibility for the above supply address.
The letter was received by Simply Energy on 29 April 2010.
Simply Energy took no steps to cancel its registration on the MSATS database as the retailer in respect of Design Joinery’s meter. AGL did not become registered on the database as the retailer in place of Simply Energy until more than a year later on 2 August 2011.
Design Joinery received no electricity invoices for electricity supply over the next few months.
On 30 August 2010, AGL sent to Design Joinery a standard form letter advising of an increase in electricity rates from 2 September 2010. On 2 September 2010, AGL issued an invoice to Design Joinery for a supply period from 7 July to 17 August 2010. It showed no previous balance. It showed usage of 28,452 kilowatt hours peak electricity and 2,627 kilowatt hours off-peak electricity and a total cost of $5,687 plus GST.[16] On 20 September 2010, Design Joinery paid the invoice.
[16] All dollar figures are rounded to the nearest full dollar and are exclusive of GST unless otherwise stated.
AGL did not issue further invoices to Design Joinery. Mr Maddeford said in cross-examination that he was unsure whether AGL credited the 2 September invoice in favour of Design Joinery.
On 16 June 2011, AGL sent a letter to Design Joinery congratulating it on its recent decision to switch to AGL for its business electricity and choosing an Advantage 10 Energy Plan. It said that Design Joinery would receive a 10 percent discount off its electricity usage charges.
On 29 June 2011, AGL sent a further letter to Design Joinery congratulating it on choosing an AGL Advantage 10 Energy Plan; setting out rates, terms and conditions; stating that Design Joinery had a 10 business day cooling off period to cancel the agreement; and stating that its transfer to AGL would be complete after its electricity meter was read and it received its final bill from its current retailer.
On 28 July 2011, AGL sent a further letter to Design Joinery congratulating it on switching to AGL.
On 3 August 2011, AGL was recorded by AEMO in the MSATS database as the retailer in respect of Design Joinery’s meter in place of Simply Energy.
On 29 August 2011, AGL wrote to Design Joinery stating that the transfer of its business electricity account was now complete and it was now officially an AGL customer.
On 17 November 2011, AGL issued two invoices to Design Joinery. One for the supply period 3 August to 22 September 2011, and another for the supply period 23 September 2011 and 18 October 2011. Thereafter, Design Joinery received invoices from AGL with respect to each subsequent monthly supply period.
On 7 February 2012, Simply Energy issued an invoice to Design Joinery for the supply period 15 April 2010 to 2 August 2011 for $89,929 plus GST. The invoice charged for usage of 291.9 megawatt hours peak electricity and 214.8 megawatt hours off-peak electricity. The rate charged for the first part of the period to 31 July 2010 ranged from 23.46 to 21.03 cents per kilowatt hour for peak electricity and was 11.71 cents per kilowatt hour for off-peak electricity. A discount of 9 percent was applied to the consumption charges.
On 4 September 2012, Simply Energy instituted the action in the District Court against Design Joinery claiming $89,929 plus GST in contract. On 10 July 2013 the proceedings were transferred to the Adelaide Magistrates Court by consent.
On 15 January 2013, Simply Energy’s solicitors sent to Design Joinery’s solicitors a replacement invoice from Simply Energy to Design Joinery dated 28 November 2012 for the supply period 15 April 2010 to 2 August 2011 for $68,045 plus GST. The invoice charged for the total usage of 304.6 megawatt hours electricity. The rates charged were the same as in the original invoice. A discount of 9 percent was applied to the consumption charges.
On 6 February 2013, Simply Energy filed an amended statement of claim claiming $68,045 plus GST in contract or alternatively in restitution[17]. It pleaded that the contract was made in March 2010 and was partly oral (the telemarketer conversation) and partly written (the small customer standard terms).
[17] A further alternative pleaded was that the defendant was a party to a default contract for the purposes of section 36AB(2) of the Electricity Act 1996. This was not addressed by the Magistrate in his reasons for judgment or by the parties on appeal and can be ignored.
On 16 December 2013, Design Joinery filed an amended defence denying existence of a contract, denying supply by Simply Energy of electricity and denying that it was a small customer for the purpose of section 36AB of the Electricity Act 1996.
The trial and the Magistrate’s reasons for judgment
Simply Energy’s case was that the parties entered into an oral contract on 19 March 2010 on terms which incorporated Simply Energy’s standard written terms. Its case was that documents subsequently provided by it to Design Joinery on approximately 25 March 2010 were provided in implementation of the oral contract. Its case was not that a contract was formed in late March 2010 or April 2010 by its making an offer in terms of those documents and Design Joinery accepting that offer by words or conduct.
What was ultimately to become the first phase of the trial proceeded on 22 and 23 April 2014. Simply Energy’s case at that point was that the small customer standard terms provided to Design Joinery in late March 2010 were incorporated by reference by the oral contract. Those terms applied as terms of the oral contract including terms as to price.
Simply Energy called Christian Caddaye, its billing integrity analyst, to give evidence about its systems for telemarketing, contracting, transfers and billing.[18] Design Joinery called Mr Maddeford to give evidence about his dealings with AGL and Simply Energy. Both parties tendered several business records. The parties made closing addresses and the Magistrate reserved judgment.
[18] Simply Energy also called Michael Shiel from its debt collector to prove post-invoice communications with Design Joinery.
On 28 May 2014, the Magistrate delivered reasons for judgment. The Magistrate found that Simply Energy was recorded as the retailer on the MSATS database in respect of Design Joinery’s meter and it was the only retailer that could have supplied Design Joinery with electrical power over that period. The Magistrate made an adverse finding about Mr Maddeford’s credibility and found that Design Joinery received the welcome pack within a few days after 25 March 2010 notwithstanding Mr Maddeford’s evidence that he did not receive anything from Simply Energy.
The Magistrate concluded that Design Joinery’s cooling off period commenced to run on receipt of the welcome pack and expired before 15 April 2010 when Simply Energy became registered as retailer on the MSATS database in respect of Design Joinery’s meter.
The Magistrate said that it was not possible to determine the action finally due to Simply Energy having failed to produce the relevant contract because Design Joinery was not a small customer and the only contract tendered at trial was the small customer standard terms. The Magistrate could not determine the contractual claim because he did not know what contract terms applied and he could not consider the restitutionary claim absent reference to the contractual provisions. The Magistrate indicated that he would entertain an application by Simply Energy to reopen its case to tender the relevant contract.
On 6 August and 1 September 2014, the Magistrate heard Simply Energy’s application for permission to reopen its case over Design Joinery’s opposition. On 12 August and 11 September 2014, the Magistrate published reasons for granting permission on terms as to costs.
On 19 December 2014, Simply Energy reopened its case. It called Sandro Menichelli, its National Sales Manager, to give evidence concerning the quotation sheet and the large customer general terms which it tendered. Mr Menichelli gave evidence about the operation of the national electricity market. Mr Menichelli produced a calculation showing costs incurred by Simply Energy for electricity supplied to Design Joinery’s meter on the basis that it was registered as the retailer. The calculation also showed charges calculated under clause 22.2 of the large customer general terms that totalled $67,671 plus GST.
The Magistrate gave ex tempore reasons for judgment. The Magistrate granted judgment in favour of the plaintiff for $67,671 plus GST plus interest fixed at $7,400. The Magistrate proceeded on the basis that a contract came into existence before 15 April 2010 and the small customer standard terms applied. The Magistrate held that clause 15.4 of those terms incorporated the substantive terms contained in the large customer general terms.
The Magistrate held that Simply Energy was entitled to payment under clause 22.2 of the large customer general terms in accordance with the formulae set out therein. The Magistrate rejected Design Joinery’s contention that the large customer general terms could not apply because no price was negotiated as contemplated by those terms. The Magistrate held that this did not matter after 20 April 2010 when Design Joinery terminated the contract and clause 22.2 superseded other terms as to price. As to the period from 15 to 20 April 2010, the Magistrate held that section 8(2) of the Sale of Goods Act 1895 (SA) applied because the contract made no provision for the price of the goods and it was implied by that subsection that Simply Energy pay a reasonable price. Alternatively, if electricity does not comprise “goods” within the meaning of the Act, the common law required that a reasonable price be determined for the cost of the electricity.
Permission to reopen case
It is convenient to address the last ground of appeal first.
Design Joinery contends that the Magistrate erred in law and in principle in permitting Simply Energy to adduce further evidence after publication of his initial reasons for judgment.
The decision by the Magistrate involved the exercise of a discretion. The discretion can only be disturbed on appeal if the Magistrate acted upon a wrong principle, mistook the facts, took into account an irrelevant matter, failed to take into account a relevant matter or made a decision manifestly unreasonable or plainly unjust.[19]
[19] House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ.
Design Joinery contends that the Magistrate failed to take into account a relevant consideration, namely that Simply Energy was on notice before and during the trial that Design Joinery was a large customer and the claim premised on its being a small customer was doomed to fail.
The Magistrate gave reasons for granting permission to reopen in which he referred explicitly to Design Joinery’s contention that Simply Energy made a deliberate decision not to address its objection that it was not a small customer. The Magistrate accepted that Simply Energy was dismissive of Design Joinery’s assertion that it was not a small customer. The Magistrate considered that it was entirely Simply Energy’s fault that it had not addressed the consequences of Design Joinery being a large customer at the original trial. The Magistrate went on to give reasons why, notwithstanding these matters, he considered that it was in the interests of justice to grant permission to reopen. I reject Design Joinery’s contention that the Magistrate failed to take into account this matter.
Design Joinery also contends that there was no conventional ground for the Magistrate to exercise his discretion to allow further evidence and he invited Simply Energy to recast its claim on a different factual basis.
The Magistrate set out at some length the principles governing consideration of whether to grant permission to reopen. It was open to the Magistrate to conclude that it was in the interests of justice to permit Simply Energy to reopen its case on terms including as to costs. It is apparent that the Magistrate did not fully appreciate the significance of the consequences of Design Joinery being a large customer until after reserving judgment. The mere fact that the Magistrate raised the issue after reserving his judgment and by way of his initial reasons for judgment does not disclose error.
No error has been demonstrated that vitiates the exercise of the Magistrate’s discretion. This ground of appeal fails.
The claim in contract
Design Joinery contends that the Magistrate erred in law in finding that a contract came into existence between the parties. The parties did not manifest an intention on 19 March 2010 to enter into a contract or agree on essential terms including price or agree to incorporate as terms of a contract the small customer standard terms. In any event, the small customer standard terms contemplated and required a contract sheet stipulating price and other matters and there was no proof of the existence of such a document. Clause 15.4 of those terms did not have the effect of incorporating the large customer general terms. The latter terms also contemplated and required a quotation sheet stipulating price and other matters. Clause 22.2 of the large customer general terms was not enlivened.
Simply Energy contends that the hubNET record coupled with Mr Caddaye’s evidence of practice proved the content of the conversation between the telemarketer and Mr Maddeford on 19 March 2010 and the evincing of an intention by the parties to enter into an oral contract on agreed terms as to price and incorporating the small customer standard terms. By virtue of the objective fact that Design Joinery was not a small customer, clause 15.4 of the standard terms incorporated such of the large customer general terms as were applicable in the circumstances. Clause 22.2 of the general terms stipulated the price after Mr Maddeford’s letter of cancellation and in the meantime it was an implied term that a reasonable price was payable.
There was a paucity of evidence adduced at trial by Simply Energy as to the content of the discussion between the telemarketer and Mr Maddeford that was said to give rise to an oral contract.
The hubNET record does not set out or refer to any terms of the offer said to have been made by the telemarketer to Mr Maddeford by reference to pricing, term of the contract, incorporation of standard written terms or otherwise, apart from a reference to a 9 percent discount off consumption.[20]
[20] It does contain a reference to an electricity product code and an electricity offer code but neither of these were explained in the evidence and merely comprise an unintelligible series of alpha-numeric characters.
The evidence given by Mr Caddaye concerning the usual practice of telemarketers was cursory. That evidence in its entirety was as follows:
You would discuss your site details, you would go through various offers, there may be different discounts, or rates you would discuss and then you would agree upon at the end and do a verbal recording where you say, ‘Do you agree to said rates?’ and you read them over the phone, you have to agree to those rates and they say ‘All right, now we are going to send you out details in the next two business days, you have then got a 10 day cooling off period. If you want to cancel in that 10 day cooling off period, you can. Then you will remain with your previous retailer. Otherwise we will take commencement of supply and then we will supply until you transfer to another retailer.’
Mr Caddaye gave evidence that in the ordinary course such conversations were recorded. No recording was tendered. Mr Caddaye said “we have changed systems and things since then, so we don’t have those on file” but no evidence was given of searches undertaken for the recording and, if Simply Energy carries on business relying upon oral contracts that are recorded, no explanation was given why it would not retain them as a matter of course when changing systems.
Assuming that no version of the recording continued to exist, no evidence was adduced by Simply Energy from the telemarketer in question or any explanation given for the failure by Simply Energy to call that person to give evidence about the telephone discussion.
Assuming that the telemarketer could not be called to give evidence, no other telemarketer or their supervisor was called to give evidence of usual practice or explaining the hubNET record. Nor were any documents in the nature of a script or otherwise evidencing instructions given to telemarketers concerning topics of and content of conversations tendered.
Mr Caddaye did not identify the topics addressed as a matter of usual practice during a telemarketing conversation other than the limited topics he identified of rates, discounts, cooling off and commencement of supply. He did not identify what was discussed as a matter of usual practice about the amount of electricity used by a customer, whether it exceeded 160 megawatt hours per year, whether the customer was a small customer or not and the significance of its categorisation in this respect to the prices and terms offered by Simply Energy or the terms of the contract offered by Simply Energy.
Mr Caddaye did not address topics relevant to the term of the contract, what was to be sent to the customer in the next few days, incorporation of standard terms or the oral conversation amounting to a legally binding contract.
Other than saying that various offers and various rates might be discussed, Mr Caddaye did not identify the substance or content of those offers and rates. Nor did Simply Energy adduce any evidence from its business records to identify what offer or offers and rates were discussed between the telemarketer and Mr Maddeford on 19 March 2010.
Simply Energy did not tender the letter enclosing or forming part of the welcome pack sent to Design Joinery on or around 25 March 2010 or the pro forma of such a letter or adduce any secondary evidence of its contents. It did not tender the contract sheet referred to in the small customer standard terms that formed a standard part of the welcome pack or the pro forma of the contract sheet or adduce any secondary evidence of its contents and specifically of the rates set out in that contract sheet.

The failure of Simply Energy to adduce primary or secondary evidence of the content of the telemarketer’s discussion with Mr Maddeford entails that it was not open to the Magistrate to find that the parties entered into an oral contract for the supply of electricity on 19 March 2010. In particular, there is no evidence on the basis of which it could be determined what rates were discussed, what rates were agreed and whether specific rates were agreed; what was the term of the putative agreement; what were the other terms of the putative agreement; or whether any standard written terms of Simply Energy were incorporated by reference and if so whether they were the small customer standard terms or the large customer general terms. Nor did Simply Energy prove confirmation of verbal acceptance as contemplated by the definition of contract sheet in clause 14.6 of the small customer standard terms.
There was no proof that objectively the parties intended to enter into a legally binding oral agreement as opposed to merely agreeing in a commercial sense intending that there be no legally binding agreement unless and until they executed a formal written agreement.[21]
[21] See Masters v Cameron (1954) 91 CLR 353 at 360 per Dixon CJ, McTiernan and Kitto JJ.
The Magistrate erred in finding the existence of a contract made on 19 March 2010.
The sending by Simply Energy of the small customer standard terms on or about 25 March 2010 did not remedy the deficiency in proof of a contract entered into on 19 March 2010. If Simply Energy had proved, directly or indirectly, the sending of a contract sheet and its contents including rates, that might have amounted to secondary evidence of rates agreed between the telemarketer and Mr Maddeford but Simply Energy did not do so.
It was not Simply Energy’s case at trial and is not its case on appeal that a contract came into existence independently of the telephone conversation by virtue of the sending of the small customer standard terms to Design Joinery on or about 25 March 2010. Those terms by clause 2.1 contemplate and provide that the customer may accept an offer made by Simply Energy by signing and returning the contract sheet or accepting online (as alternatives to an oral contract by verbal acceptance). There was no suggestion at trial that Design Joinery signed and returned contract terms or accepted online and I have concluded above that Simply Energy failed to prove an oral contract.
Simply Energy failed to prove the existence of any contract with Design Joinery and its cause of action in contract should have been dismissed.
This conclusion renders it unnecessary to consider Design Joinery’s other contentions that clause 15.4 of the small customer standard terms did not have the effect of incorporating the large customer general terms and clause 22.2 of the large customer general terms was not in any event enlivened.
The claim in restitution
On appeal, Simply Energy contends that the judgment can be supported by the cause of action in restitution if it cannot be supported in contract.
Simply Energy pleaded a cause of action in restitution. The Magistrate did not decide whether that cause of action was established.
Simply Energy contends that on or about 19 March 2010 Mr Maddeford requested that Simply Energy take over as Design Joinery’s electricity retailer, Simply Energy supplied electricity thereafter pursuant to that request and Simply Energy has a conventional cause of action in restitution. Alternatively, Design Joinery freely accepted its supply of electricity. This gives rise to a cause of action in restitution.
Design Joinery contends that Simply Energy failed to prove a request on 19 March 2010 that Simply Energy take over as Design Joinery’s electricity retailer and in any event any request was countermanded by the 20 April 2010 letter.
Design Joinery contends that Simply Energy did not “supply” electricity because it was physically supplied by the generators and distributor and Simply Energy only performed an economic role.
Design Joinery contends that the English doctrine of free acceptance has not been adopted in Australia and in any event Design Joinery had no choice but to take the electricity supplied to it regardless of the state of the retailer register.
Design Joinery contends that, if a cause of action in restitution were made out, the amount should be based on the cost of the supply of the electricity from the generator to the retailer and no admissible evidence was adduced at trial of that cost.
Existence of a request
In Lumbers v W Cook Builders Pty Ltd,[22] Gummow, Hayne, Crennan and Kiefel JJ said:
The doing of work, or payment of money, for and at the request of another, are archetypal cases in which it may be said that a person receives a "benefit" at the "expense" of another which the recipient "accepts" and which it would be unconscionable for the recipient to retain without payment.
…
If Builders did whatever work it did and paid whatever money it paid at the Lumbers' request, Builders' claim for a reasonable price for the work and for the money it paid would fall neatly within long‑established principles. It would matter not at all whether the request was made expressly, or its making was to be implied from the actions of the parties in the circumstances of the case. Builders would have an action for work and labour done or money paid for and at the request of the Lumbers.[23]
[22] [2008] HCA 27; (2008) 232 CLR 635.
[23] At [79] and [89]. (Footnotes omitted).
Although the parties did not enter into a legally binding agreement on 19 March 2010, the evidence adduced by Simply Energy clearly established that during the telephone conversation Mr Maddeford on behalf of Design Joinery agreed to Simply Energy becoming its electricity retailer in place of AGL and supplying electricity to Design Joinery. Although the telephone conversation was initiated by Simply Energy, Mr Maddeford’s part in the conversation amounted to a clear request to Simply Energy to supply electricity to Design Joinery.
Design Joinery contends that, even if there was an initial request, it was countermanded by Mr Maddeford’s letter dated 20 April 2010 in which he gave notice of cancellation of any requests made to transfer the responsibility for Design Joinery’s premises. The nature of that communication, its consequences and the subsequent conduct of both parties need to be considered to determine whether the letter operated to countermand the initial request.
The Magistrate found, and the finding is accepted on appeal, that Simply Energy remained registered on the MSATS database as the retailer responsible for the supply of electricity to Design Joinery’s premises throughout the period from 15 April 2010 to 2 August 2011. Objectively, Simply Energy was liable in the wholesale electricity market to pay for the electricity used at Design Joinery’s premises.
It is explicitly accepted on appeal by both parties that Mr Maddeford knew that apart from the isolated August 2010 AGL invoice Design Joinery was not receiving invoices from any electricity retailer over the period from 15 April 2010 to 2 August 2011 although he did not necessarily know who was the retailer responsible in the wholesale market for the electricity supplied.
Mr Maddeford’s letter dated 20 April 2010 was dispatched by mail. Mr Maddeford did not know whether it had been received or acted upon by Simply Energy. While it transpires that it was in fact physically received by Simply Energy on 28 April 2010, it was not acted upon (albeit this was entirely the fault of Simply Energy in not processing the letter).
From the perspective of Design Joinery, while it had dispatched a cancellation of its initial request, it did not know that it had been received. From the perspective of Simply Energy, the letter had been physically received but it had not been received in an operative sense. Simply Energy remained the registered retailer on the MSATS database responsible for the supply of electricity to Design Joinery’s premises throughout the period from 15 April 2010 to 2 August 2011. In these circumstances, ignoring for the time being AGL’s August 2010 invoice, there was no effective countermanding of the initial request by Design Joinery to Simply Energy to supply electricity.
Does the issue by AGL of its invoice on 2 September 2010 affect the question whether Design Joinery countermanded the initial request to Simply Energy or otherwise vitiate a claim in restitution by Simply Energy against Design Joinery?
The Magistrate found that Mr Maddeford’s evidence about Design Joinery’s dealings with AGL, including in relation to the 2 September invoice, was incomplete and unsatisfactory. It was put to Mr Maddeford in cross examination that AGL credited the 2 September invoices in full, to which Mr Maddeford responded “I don’t know.” Design Joinery did not produce its records of its financial dealings with AGL that would show whether or not it received a credit after paying the invoice.
Between 16 June and 29 August 2011, AGL sent four letters to Design Joinery congratulating it on changing retailer to AGL for the supply of its electricity and addressing the terms of supply. The inference should be drawn that these letters were sent as a result of a request in June 2011 by Design Joinery to AGL to commence supplying electricity. Those letters are to be contrasted with AGL’s actions in August/September 2010 which made no reference to any change. AGL issued no further invoices after September 2010. Simply Energy remained the registered retailer on the MSATS database responsible for the supply of electricity to Design Joinery’s premises throughout the period from 15 April 2010 to 2 August 2011. Mr Maddeford gave evidence that when he was receiving electricity invoices he was always concerned about their significant cost which was of the order of $3,000 per month. In these circumstances, the inference should be drawn that the 2 September invoice was an aberration issued by AGL by mistake when it was not the registered retailer, this mistake was not repeated and it was rectified by AGL issuing a full credit of the 2 September invoice. In these circumstances, the aberration does not impinge upon the issues relating to the restitution cause of action.
Existence of supply
Design Joinery contends that electricity is a peculiar commodity to be contrasted with goods that are sold and delivered. The electricity for which Simply Energy seeks to charge was physically supplied by the generators and distributors and Simply Energy cannot be characterised as supplying it for the purpose of the supply element of the cause of action in restitution. Nothing passed from Simply Energy to Design Joinery. Simply Energy merely failed to realise an opportunity to make an economic profit from the supply of electricity from a third party to Design Joinery.
Design Joinery contends that it was not proved that remaining the registered retailer cost Simply Energy money but even if it did it would not be a cost for which Design Joinery should be liable because Design Joinery could not have done any more to make it clear that it did not wish Simply Energy to be its retailer and could not know that it had become and remained registered as such.
I reject these contentions. As to the first contention, it is apparent from the evidence adduced at trial that if Simply Energy had not accepted responsibility as the retailer in respect of Design Joinery’s meter which entailed a liability to pay for electricity generated, the distributor would have disconnected supply to Design Joinery’s meter and its premises. It is a fundamental tenet of the electricity market that generators and distributors deal with and notionally supply electricity to retailers, and in turn retailers deal with and notionally supply electricity to end users. Retailers are necessarily interposed between generators and distributors in the wholesale market and customers in the retail market. In these circumstances, it matters not that the electricity was physically generated by the generators and distributed by the distributor and that a retailer’s role in the market might be characterised as an economic or financial one rather than a physical one.
As to the second contention, Mr Menichelli gave unchallenged evidence that Simply Energy was liable to pay various charges in the wholesale market for the supply and distribution of electricity to Design Joinery’s premises based on the quantity of electricity used at the premises and charges for ancillary services such as meter reading. Design Joinery received the benefit of continuing supply of electricity after 15 April 2010 which it would not have received if Simply Energy had not accepted a continuing liability in the wholesale market for the cost of that supply. Design Joinery had no expectation that it was entitled to the supply of free electricity, knew that the supply of electricity comes at a cost and knew that the electricity was being supplied by a retailer albeit Mr Maddeford did not know whether that retailer was Simply Energy – from whom he had requested supply on 19 March 2010 – or AGL – who had sent him the pro forma letter of cancellation to be sent to Simply Energy. In these circumstances, it matters not that Simply Energy had posted the letter of cancellation or that Mr Maddeford did not know whether the retailer supplying electricity was Simply Energy or AGL.
Free acceptance
Given that Simply Energy supplied electricity to Design Joinery pursuant to a request by Design Joinery to do so giving rise to a conventional action in quantum meruit or quantum valebat,[24] there is no need to consider whether the English doctrine of free acceptance is applicable in Australia or if so applies in this case.
[24] It does not matter for the purposes of the cause of action in restitution whether electricity is characterised as a good, a service, a hybrid or a commodity that is neither a good nor a service.
Amount recoverable in quantum meruit/valebat
The amount recoverable in quantum valebat and quantum meruit is the fair and reasonable value of the goods supplied or work performed.[25] While the question to be determined is the value of the benefit conferred on the defendant, often the best measure of the value will be the cost to the plaintiff of procuring the goods or performing the work together with a reasonable margin for overhead and profit.[26]
[25] Pavey & Matthews Proprietary Limited v Paul (1987) 162 CLR 221 at 263-264 per Deane J; Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141; 24 VR 510 at [25] per Maxwell P, Kellam JA and Whelan AJA.
[26] Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141 at [29]-[30] and [34]-[35] per Maxwell P, Kellam JA and Whelan AJA.
Mr Menichelli gave evidence of the cost to Simply Energy of buying the electricity in the wholesale market that was supplied to Design Joinery’s premises. He gave evidence that Simply Energy incurred five types of cost in connection with the supply of electricity to Design Joinery’s premises:
1.the cost payable for the generation of electricity;
2.the cost payable for the distribution of electricity;
3.the cost payable for renewable energy certificates;
4.fees and charges payable to AEMO; and
5.the cost payable for metering services.
Mr Menichelli gave evidence that Simply Energy was required to pay for the cost of energy passing through Design Joinery’s meter at specified rates per megawatt hour for each half-hour block of usage. Mr Menichelli gave evidence that the half hourly spot price for various regional nodes was published by AEMO on its website. Mr Menichelli extracted the half hourly spot prices for the period from 15 April 2010 to 2 August 2011 for the South Australian regional node and transposed them into a spreadsheet. Mr Menichelli extracted the half hourly electricity usage recorded by Design Joinery’s meter for the same period and transposed it into the same spreadsheet. This enabled calculation of the cost payable by Simply Energy for the supply of that energy.
Mr Menichelli produced AEMO’s publication List of Regional Boundaries and Marginal Loss Factors for the 2009-10 Financial Year[27] which shows that the marginal loss factor for the South Australian VTN was 1.0057. Mr Menichelli gave evidence that this was the loss factor applicable to Design Joinery’s premises. Mr Menichelli produced AEMO’s publications Distribution Loss Factors for the 2009/10, 2010/2011 and 2011/2012 financial years[28] which show that the distribution loss factors for the Low Voltage class in Table E1 were 1.074, 1.0814 and 1.0765 respectively. Mr Menichelli gave evidence that these were the loss factors applicable to Design Joinery’s premises.
[27] Exhibit P11.
[28] Exhibits P12, P13 and P14.
Mr Menichelli’s spreadsheet multiplied the half hourly spot price (subject to an addition) by the half hourly usage to obtain the half hourly unadjusted “spot cost”. The addition was that the spreadsheet added $50 per megawatt hour to the half hourly spot price before multiplying the modified half hourly spot price by the half hourly usage to produce the half hourly unadjusted “spot cost”. This produced a figure exceeding the cost of the energy by $50 per megawatt hour. The spreadsheet then multiplied the resulting product by the marginal and distribution loss factors referred to in the previous paragraph to produce an adjusted “spot cost” for each half hour. The spreadsheet then summed the adjusted half hourly “spot costs” to produce a sum of $29,967. This exaggerated the cost by $50 per megawatt hour multiplied by the marginal and distribution loss factors. On the basis that the total usage by Design Joinery between 15 April 2010 and 2 August 2011 was 304.6 megawatt hours, the spreadsheet exaggerated the cost of energy to Design Energy by $16,564 and the actual cost was $13,403.
Mr Menichelli gave evidence that Simply Energy was required to pay for the distribution of the electricity passing through Design Joinery’s meter at specified rates per megawatt hour for each half-hour block of usage together with a daily supply charge. Mr Menichelli produced ETSA Utilities’ publications ETSA Utilities Network Tariffs for the 2009/10 and 2010/2011 financial years[29] which show Low Voltage Business – 2 Rates comprising for the first financial year an off-peak rate of 3.3794 cents per kilowatt hour, peak rates ranging from 10.9988 to 9.6397 cents per kilowatt hour and a supply rate of 30.0071 cents per day. Mr Menichelli made a calculation multiplying the ETSA rates by the electricity usage recorded by Design Joinery’s meter to produce a total of $33,345.
[29] Exhibit P15.
Mr Menichelli gave evidence that Simply Energy was required by the federal government’s MRET scheme to purchase a specified quantity of renewable energy certificates for every megawatt hour of energy purchased. Mr Menichelli produced the Australian Government Clean Energy Regulator’s publication About the Renewable Energy Target[30] that explains the scheme. Mr Menichelli gave evidence that he estimated the cost to Simply Energy of purchasing renewable energy certificates to offset the electricity supply to Design Joinery by comparing the amounts charged at cost by Simply Energy to consumers with similar consumption and similar peak/off-peak splits to Design Joinery and this resulted in a cost of $1,860.
[30] Exhibit P17.
Mr Menichelli calculated the cost of metering service charges to Simply Energy for 475 days at $2.69 per day to give a metering cost of $1,278.
Mr Menichelli gave evidence that Simply Energy was required to pay to AEMO monthly pool fees of 40 cents per megawatt hour and ancillary charges of 50 cents per megawatt hour of electricity used. Mr Menichelli calculated the pool fees and ancillary charges based on Design Joinery’s usage at $281.
The total of these five costs amounts to $50,167 or $55,184 including GST.

In principle, adopting a cost-based approach to assessing the reasonable value of the electricity supplied by Simply Energy to Design Joinery, it would have been appropriate to include a component, based probably on a percentage markup on cost, to allow for overhead and profit. However, Simply Energy did not lay an evidentiary basis at trial to make any assessment of what would be an appropriate allowance for this purpose.
Simply Energy contends that, while one measure of the reasonable value of the electricity supplied is based on cost, a more appropriate measure would be based upon market prices charged by retailers to customers with energy requirements of the order of those of Design Joinery. However, before a market price-based measuring approach could be considered and compared with a cost-based measuring approach, it would have been necessary for Simply Energy to lay an evidential basis identifying market prices. Despite its contention to the contrary, Simply Energy failed to do this.
Simply Energy relies upon the formula contained in clause 22.2 of its large customer general terms which provides for pricing based on a markup of $50 per megawatt hour on electricity used plus MRET costs plus pass through pricing for network charges, market charges and metering charges. This formula produced a total of $67,671. However, I accept Design Joinery’s submission that this is a default rate and is not an appropriate indicator of market pricing. Mr Menichelli gave evidence that at the relevant time Simply Energy had about 500 large customers, of whom about 400 had entered into fixed term fixed price contracts and about 100 had entered into pool pass through contracts. Simply Energy did not adduce evidence of the prices charged to either category of large customers.
Simply Energy also points to the rates charged in its February and November 2012 invoices issued to Design Joinery. However, Simply Energy did not adduce evidence that these rates were charged or were commonly charged to its large customers (or even its small customers).
Simply Energy points to the rates charged by AGL in its invoices issued to Design Joinery. However, no evidence was adduced of the origin of those rates; whether they were applicable to small or large customers and in what circumstances; how they compared to rates charged generally by AGL to large customers; and how they compared to rates charged generally by other retailers in the market.
On the other hand, the fact that the rates referred to in the Simply Energy and AGL invoices rendered to Design Joinery produce total amounts substantially in excess of the cost-based total derived above gives comfort that the cost-based approach does not work an unfairness upon Design Joinery.
Simply Energy tendered on appeal a further affidavit by Mr Menichelli sworn on 9 April 2015. Design Joinery objected to the tender on the ground that it does not qualify as fresh evidence in accordance with ordinary principles. Simply Energy conceded that the new evidence does not qualify as fresh evidence. It contended that it should be received in the exercise of the Court’s discretion. I declined to receive the new evidence.
Conclusion
The Magistrate erred in concluding that the parties entered into a contract in March 2010 and that Simply Energy was entitled to judgment in contract for $74,438 and interest. I allow the appeal and set aside the judgment granted by the Magistrate.
Simply Energy was entitled to judgment in restitution for $55,184 and interest. I will hear the parties as to interest and costs.