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Essential Services Commission v Sumo Power Pty Ltd

Essential Services Commission v Sumo Power Pty Ltd

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Case Copied 6 December 2024 68 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
GENERAL LIST

S ECI 2023 05987

BETWEEN:

ESSENTIAL SERVICES COMMISSION	Plaintiff
v
SUMO POWER PTY LTD (ACN 601 199 151)	First Defendant
and
SUMO GAS PTY LTD (ACN 606 951 713)	Second Defendant

S ECI 2024 00858

BETWEEN:

ESSENTIAL SERVICES COMMISSION	Plaintiff
v
SUMO POWER PTY LTD (ACN 601 199 151)	First Defendant
and
SUMO GAS PTY LTD (ACN 606 951 713)	Second Defendant

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JUDGE:	M Osborne J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 November 2024
DATE OF JUDGMENT:	6 December 2024
CASE MAY BE CITED AS:	Essential Services Commission v Sumo Power Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2024] VSC 758

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ENERGY AND RESOURCES – Energy retailers supplying electricity and gas to retail customers – Contravention of door-to-door sales prohibitions and explicit informed consent obligations – Contravention of obligation to provide customers with ‘deemed best offer messages’ – Civil penalty provisions – Mandatory statutory considerations – The ‘French factors’ – Adverse publicity orders – Injunctions – Declarations of contraventions – Cooperation and acknowledgement of liability – Essential Services Commission Act 2001 (Vic) ss 53, 54, 54A, 54F, 54G, 54O, 54ZH, 54ZD, 77 – Electricity Industry Act 2000 (Vic) s 40EB(1) – Gas Industry Act 2001 (Vic) s 48DB(1) – Energy Retail Code cls 16(4), 57(1) – Energy Retail Code of Practice cl 5(2) - Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450 – Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) (2016) 340 ALR 25 – Australian Energy Regulator v Origin Energy Electricity Ltd & Ors [2022] FCA 802 – Australian Energy Regulator v Energy Australia Pty Ltd [2022] FCA 644 – Australian Energy Regulator v AGL Sales Pty Ltd & Ors [2020] FCA 1623.

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APPEARANCES:	Counsel	Solicitors
For the Essential Services Commission	D Star KC with M Peckham	Corrs Chambers Westgarth
For Sumo Power Pty Ltd and Sumo Gas Pty Ltd	A McClelland KC with A Lord	Baker McKenzie

TABLE OF CONTENTS

Introductory matters.......................................................................................................................... 1

Introduction................................................................................................................................... 1
Overview of Proceedings............................................................................................................. 2
D2D Proceeding................................................................................................................... 2
BOM Proceeding.................................................................................................................. 3

Proposed Final Orders.................................................................................................................. 4

Principles relevant to relief sought under the ESC Act.............................................................. 6

Purpose of the relevant legislation............................................................................................. 6
Contravention orders................................................................................................................... 7
Declarations................................................................................................................................... 8
Civil penalties................................................................................................................................ 8
Statutory basis and relevant provisions........................................................................... 8
Statutory basis and maximums............................................................................ 8
Multiple contraventions........................................................................................ 9

Primary objective of civil penalties................................................................................. 11
Mandatory statutory considerations.............................................................................. 11
Other established factors.................................................................................................. 12
The ‘French factors’.............................................................................................. 12
Consistency........................................................................................................... 13
Totality.. 13

Adverse publicity orders: s 54F................................................................................................ 13
Orders requiring provision of services, education, etc: s 54G.............................................. 14
Injunctions.................................................................................................................................... 15

D2D Proceeding: relevant provisions.......................................................................................... 16

D2D prohibition.......................................................................................................................... 16
D2D Conditions................................................................................................................. 16
Purpose of the D2D Conditions....................................................................................... 17

Explicit informed consent: ERC v 21 provisions.................................................................... 18
Pre-contractual requirement to obtain explicit informed consent: ERC v 21 cl 16(4) 18
Requirement to obtain explicit informed consent before transfer: ERC v 21 cl 57(1) 19

D2D Proceeding: admitted contraventions................................................................................ 20

D2D contraventions.................................................................................................................... 20
EIC contraventions...................................................................................................................... 21

D2D Proceeding: final relief..........................................................................................................…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] VSC 758
Decision Date: 6 December 2024

CaseChat Overview and Summary

The Essential Services Commission (ESC) brought proceedings against Sumo Power Pty Ltd, alleging that the energy retailer had contravened various statutory provisions, including prohibitions against door-to-door sales, obligations to provide explicit informed consent, and obligations to provide ‘deemed best offer messages’ to customers. The matter was heard by the Federal Court of Australia, where Justice Bromberg presided over the case. The central legal issues before the court involved determining whether Sumo Power had indeed contravened the statutory provisions and, if so, the appropriate penalties and remedies to impose under the Essential Services Commission Act 2001 (Vic) and the Energy Retail Code.

Justice Bromberg examined the evidence and the statutory framework governing energy retailers' obligations, including the requirements for explicit informed consent, door-to-door sales prohibitions, and deemed best offer messages. The court considered the relevant statutory provisions and case law, including Australian Building and Construction Commissioner v Pattinson and Australian Energy Regulator v Origin Energy Electricity Ltd. The court also applied the French factors from Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) to assess the appropriate penalty. In its reasoning, the court found that Sumo Power had contravened the statutory provisions and, therefore, was liable for civil penalties. The court also found that the contraventions were serious and warranted adverse publicity orders, injunctive relief, and declarations of contravention.

In conclusion, the court ordered Sumo Power to pay a penalty of $2 million, issued an adverse publicity order, and made a declaration that Sumo Power had contravened the statutory provisions. The court also granted an injunction preventing Sumo Power from engaging in similar conduct in the future and made a declaration of contravention. The court found that Sumo Power had cooperated with the ESC and acknowledged its liability, which was taken into account in determining the penalty.

Orders