Icon Water Limited v Muir
[2018] ACAT 75
•27 July 2018
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
ICON WATER LIMITED v MUIR & ANOR (Civil Dispute) [2018] ACAT 75
XD 629/2017
Catchwords: CIVIL DISPUTE – claim for unpaid water supply services and sewerage services to commercial units registered in respondent’s sole name in accordance with provisions of the Utilities Act 2000 – services made available for provision of connection services – commercial units not physically connected to the water or sewerage network – water and sewerage network connected to common property of Unit Plan 328 – commercial units using the facilities in common property – Standard Customer Contract approved by Independent Competition and Regulatory Commission an enforceable contract – Independent Competition and Regulatory Commission set the applicant’s water and sewerage charges and the tariff structure of water and sewerage charges in accordance with Independent Competition and Regulatory Commission Act1997, ACT Government Policy and National Water Initiative Pricing Principles – whether unfair that owner be required to contribute to the Territory’s water and sewerage network where its use is limited
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 16, 17, 18
Independent Competition and Regulatory Commission Act 1997 ss 7, 19L
Unit Titles Act 2001 ss 34, 35
Unit Titles (Management) Act 2011, ss 19, 20, 22, 23, 24
Utilities Act 2000 ss 3, 4, 11, 12, 13, 14, 87, 88, 89, 90, 91, 92
Subordinate
Legislation cited: Court Procedures Rules 2006Water and Sewerage Network Boundary Code
ACTEW Corporation Water and Sewerage Service and Installation Rules
Tribunal: Presidential Member E Symons
Date of Orders: 27 July 2018
Date of Reasons for Decision: 27 July 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 629/2017
BETWEEN:
ICON WATER LIMITED
Applicant
AND:
DAVID MUIR
First Respondent
THE OWNERS CORPORATION – UNITS PLAN NO 328
Third Party
TRIBUNAL:Presidential Member E Symons
DATE:27 July 2018
ORDER
The Tribunal orders that:
1.Judgment for the applicant in the sum of $7,695.68 plus interest on that amount calculated in accordance with the Court Procedures Rules 2006 from 29 April 2017 to date, $527.80, and the filing fee of $290.00.
2.The respondent pay to the applicant the judgment monies in order 1 in the sum of $8,513.48 by close of business 27 September 2018.
3.The respondent’s counter claim is dismissed.
4.The Third Party claim is dismissed.
………………………………..
Presidential Member E Symons
REASONS FOR DECISION
1.Icon Water Limited (applicant) is a water and waste water public utility owned by the ACT Government. The applicant owns and manages the water and wastewater business and assets in the Australian Capital Territory.
2.David Muir (respondent) was at all material times the registered proprietor of Units 35, 36, 37 and 38 in Units Plan 328 (UP 328) at 59-61 Wollongong Street Fyshwick (the units).
3.The applicant filed a debt application (application) against the respondent for $7,695.68 plus interest[1] and costs in respect of charges payable by the respondent for water supply services and sewerage services provided in accordance with the relevant statutes and invoiced in accordance with the statutory rates for the financial years 1 July 2013 to 30 June 2014; 1 July 2014 to 30 June 2015; 1 July 2015 to 30 June 2016 and 1 July 2016 to 30 June 2017.
[1] Interest is defined in the applicant’s ‘Standard Customer Contract’ as – “for a period means the amount calculated in accordance with the Supreme Court interest rate(s) for post-judgment interest applying for that period, as set from time to time by the Court Procedure Rules 2006”
4.The respondent opposed the application and filed a counter claim reserving his right to recover loss of earnings and unnecessary costs incurred for expert reports.
5.The Owners Corporation – UP 328 was joined as a third party.
Summary of Tribunal decision
6.The respondent is the trustee for the Muir Family Trust. The Tribunal found that the trustee is the person who owns or controls the assets of the trust and who can sue and be sued on matters connected with the trust. As the sole registered proprietor of the units the respondent is classified as the owner of the units for all relevant purposes. He was correctly named as the respondent in these proceedings.
7.The Tribunal found that the applicant has made available to the respondent the water and sewerage networks for the supply of services, which satisfied the relevant definitions under the Utilities Act 2001 and the respondent is liable for the charges, interest and fees the subject of this application.
8.In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ refers to the current member hearing this matter.
Background
9.The respondent’s chronology shows that there has been a long running dispute between the parties. In October 2013 the respondent requested the applicant investigate the supply of water and sewerage to the units as “it did not exist’. The dispute did not resolve.
10.The applicant filed the application on 5 June 2017 and the respondent filed his response on 3 July 2017.
11.At a preliminary conference on 3 August 2017 directions were made for the filing of material by both parties and the matter was set down for hearing on 10 October 2017. The hearing date was subsequently changed to 20 October 2017.
12.On 29 August 2017 the applicant filed a statement by Jeremy Jackson, Team Leader of Customer Solutions (Customer and Community Affairs) for the applicant, dated 22 August 2017 and Exhibits JJ-1 to JJ-69 of the statement by Jeremy Jackson.
13.On 12 October 2017 the applicant filed submissions (version 1.0) and extracts of relevant legislation and instruments. On 27 October 2017 the applicant filed revised submissions (version 1.2).
14.On 20 October 2017 the hearing was adjourned to 7 November 2017.
15.On 23 October 2017 Steven Taleski, the applicant’s legal practitioner, filed his statement on behalf of the applicant.
16.On 1 November 2017 the respondent filed an application for interim or other orders seeking that the Owners Corporation – UP 328 be joined as a third party. The Owners Corporation – UP 328 also sought that it be joined as a third party.
17.On 7 November 2017 the tribunal ordered that the Owners Corporation – Units Plan 328 is joined as a third party and listed the matter for a preliminary conference on 21 November 2017.
18.At the preliminary conference on 21 November 2017 the tribunal set the matter down for hearing on 5 February 2018 and made directions for the respondent, third party and the applicant to give to the tribunal and the other parties the documentary evidence relied on.
19.On 5 December 2017 the respondent filed an amended response in which he disputed the application on the following grounds:
1. I am not the owner of the said parcels of land – the owners as evidence (sic) by the contract of sale upon which stamp duty was levied is David Muir as trustee for the Muir Family Trust.
2. And/or in the alternative, no service has been provided as required under section 92 of the Utilities Act, therefore no contract exists.
3. And/or in the alternative, a water or sewerage service has not been made available for the provision of water or sewerage connection services as required under section 11 and 13 of the Utilities Act 2000.
4. And/or in the alternative, the terms of the Standard Water Contract when in force as currently interpreted by the Utility service are not fair and reasonable as required by section 89 of the Utilities Act 2000.
5. And/or in the alternative the water and sewerage supply service has not been supplied to the premises owned by the person as required by section 84 and 86 of the Utilities Act 2000.
6. And/or in the alternative for the financial years 2013, 2014, 2015 and 2016 the Standard Water Contract “Unconnected Charges” of water and sewerage services must have been installed and available to supply water and sewerage to the land as per Schedule of Charges 2013/14, 2014/15, 2015/16 clauses 1.6 and 4.5; and because the land is Class 5 each unit comprises a separate parcel of land. The water and sewerage services have not been installed and available to each parcel of land (the Units) therefore charges cannot be charged.
7. And/or in the alternative for the financial years 2017 and 2018 Class 6 sewerage and water supply charges have been charged and these are invalid as “This charge does not apply to a parcel of land in Class 3 Unit Title or community Title”. There is now no applicable class to charge a unit holder where there is no connection or supply to its parcel of land. The current Standard Water Contract has therefore been made clearer so that no unfair or unreasonable interpretation could be attempted by the Utility Services Provider and its lawyers.
8. And/or in the alternative the charging for a product or service where no product or service is given in consideration for the charges is tantamount to a tax and the Utility Service Provider is (sic) not have the power(sic) tax anyone.
20.The respondent also filed a counter claim seeking $10,000 on the ground that:
This dispute has been running for 3 years with numerous request of the Utility Provider to rectify the unjust charges. The respondent has had to engage considerable time and has loss of opportunity to generate income as a result and has incurred costs of expert reports. The respondent reserves its rights to recover loss of earnings, unnecessary costs incurred for expert reports.
21.On 20 December 2017 the third party filed its response which stated:
The Owners Corporation is not responsible for payment of this money. It does not get charged in other Owners Corporations for common property.
22.On 22 January 2018 the applicant filed a further statement by Steven Taleski dated 17 January 2018, the applicant’s submissions (version 1.2, referred to as version 1.3 at the hearing) and extracts of legislation and instruments.
23.At the hearing on 5 February 2018 Mr Steven Taleski, Solicitor, appeared for the applicant, the respondent represented himself and Ms Judy Farrelly, Senior Strata Manager with LJ Hooker Strata ACT, appeared for the third party.
24.Jeremy Jackson gave evidence for the applicant and was cross examined. Neither the respondent nor the third party had filed witness statements. Apart from the Icon Rules and Mr Stodulka’s written report dated 5 December 2017 the respondent did not provide evidence at the hearing. The third party also did not provide evidence. The following documents were tendered and marked as Exhibits:
Exhibit A1 Statement of Jeremy Jackson Exhibit A2 Statement of Steven Taleski dated 20 October 2017 Exhibit A3 Statement of Steven Taleski dated 17 January 2018 Exhibit R1 The Icon Rules Exhibit R2 The report from Andrea Stodulka dated 5 December 2017 (first report) 25.The hearing then proceeded by way of oral and written submissions from the applicant and oral submissions from the respondent. Ms Farrelly did not make any submissions on behalf of the third party. At the conclusion of the hearing the Tribunal made the following orders:
1. Respondent to obtain and provide to the Third Party and to the Applicant by close of business 6 March 2018
(a) a further report from Andy Stodulka after Mr Stodulka has considered all the submissions and Jeremy Jackson’s witness statement and
(b) a witness statement by Andy Stodulka which sets out his experience, his compliance with the Expert Code of Conduct and annexes a copy of the Respondent’s written request for the further report and Mr Stodulka’s report.
2. Applicant to provide any expert report in reply by close of business 3 April 2018.
3. Respondent to ensure that Applicant’s expert has access to the premises and to the common property for the purpose of preparing the Applicant’s expert report.
4. Applicant and Respondent to lodge final written submissions with the Third Party and provide a copy to the other party by close of business 27 April 2018.
5. Liberty to either party to apply on 5 days’ notice.
6. Decision reserved.
26.The respondent filed a supplementary expert’s report from Andrea Stodulka dated 16 April 2018 (second report). He did not file any witness statements or written submissions.
27.On 16 May 2018 the applicant filed two expert witness statements, one from Ian McDonell, Acting Team Leader of Developer Services in the employ of the applicant dated 11 May 2018, and the other from Sam Sachse, the applicant’s Chief Financial Officer, also dated 11 May 2018.
28.This is the Tribunal’s decision.
Jurisdiction
29.The applicant filed a civil dispute – debt application in the tribunal pursuant to sections 16(c) and 17 of the ACT Civil and Administrative Tribunal Act (ACAT Act). These sections relevantly provide:
16. Meaning of civil dispute and civil dispute application—Act
In this Act:
“civil dispute” means a dispute in relation to which a civil dispute application may be made.
“civil dispute” application means an application that consists of 1 or more of the following applications:
(a) …
(b) …
(c)a debt application;
17. Civil dispute applications
A person may make a civil dispute application to the tribunal.
30.The application does not exceed the $25,000 limit on civil dispute applications in section 18 of the ACAT Act. The Tribunal has jurisdiction to hear this application.
31.The respondent claimed that the applicant had brought this claim against the incorrect party, as he owned the units as Trustee for the Muir Family Trust. The Tribunal will determine this issue first.
Is the respondent the correct party?
32.The respondent submitted to the Tribunal that, notwithstanding the title searches for the units which were annexed to Exhibit A1, being the witness statement of Jeremy Jackson,[2] he is not and was not the owner of the units. He relied upon a contract of sale in which the purchaser was named David Muir as trustee for the Muir Family Trust.
[2] As JJ – 1, JJ – 2, JJ – 3 and JJ-4 to Exhibit A1
33.A trust does not have the capacity to hold assets in its own name; it is not allowed to sue or be sued. Legal title to assets is vested in the trustee. The trustee is the person who owns or controls the assets of the trust and who can sue and be sued on matters connected with the trust.
34.The Dictionary[3] to the Utilities Act 2000 defines ‘owner’ of land or premises as:
…
(d)for a unit under the Unit Titles Act 2001 – the unit owner; or
..
whether alone or together with 1 or more people.
[3] Section 4 Utilities Act 2000
35.The title searches state that David John Muir is the registered proprietor of each of the units. As the sole registered proprietor of the units the respondent is classified as the owner of the units for all relevant purposes.
36.For these reasons the Tribunal finds that David Muir was correctly named as the respondent in these proceedings.
The units
37.The respondent emphasised during the hearing that the units were located in an older building in Fyshwick and did not have an active water and sewerage connection. He relied on the report from his expert witness, Andy Stodulka. Mr Stodulka asserted that the units were designed in such a way that it was never contemplated that the units would ever be connected to the water and sewerage network.
38.The units are located in Fyshwick Plaza, Wollongong Street Fyshwick and are part of UP 328, which comprises 40 units. The applicant’s units are located on the first floor of a free standing hexadecagon[4] two storey brick building located towards the front of the block on Wollongong Street. There are eight units, including the respondent’s four units, on the first floor which are situated around a central service core comprising the common area and the wet area (common property). There are seven units on the ground floor of this building and 25 units located in the single level buildings along three sides of the property.
[4] 16 sided
39.Mr Stodulka described the architectural features of the building in which the units are located in his second report dated 16 April 2018 as:
… the overhanging mushroom form, the ground floor units being immediately under the subject premises, the ceiling of the ground floor is the concrete slab of the first floor – there is no suspended ceiling space…
and
the building design is unique in that a considerable portion of the first floor overhangs the ground floor premises and forms over cover walking and parking area.
40.It is not in dispute that the Water and Sewerage Network is available to the common property in UP 328. UP 328 is connected to and uses the Water and Sewerage Network. The occupants of the applicant’s units and their visitors use the facilities in the common property.
41.What is in dispute is whether the applicant’s Water and Sewerage Network is available to the units.
Applicant’s submissions
42.Mr Taleski submitted that the main issue concerned legislative interpretation. He submitted if a property in the ACT has access to the networks it pays for supply of the utilities irrespective of whether it uses the services. If a network is available to the respondent’s units the respondent is liable to pay. A network is available to the units. Therefore, the respondent is liable to pay the fees and charges the subject of this application.
43.Mr Taleski set out the framework pursuant to which the applicant operates in the Australian Capital Territory. The Independent Competition and Regulatory Commission (ICRC) is the ACT independent regulator for competition and pricing and has responsibility for licensing utility services. It determines the maximum price that can be charged for, inter alia, water and waste water services in the Territory. The Utilities Act 2000 (Utilities Act) provides a framework under which the ICRC regulates certain aspects of the provision of utility services in the ACT.
44.The ICRC monitors the applicant’s fees and charges to determine whether they are fair and reasonable and being fairly spread across the community. Before any charges can be approved, the ICRC undertakes a formal process where they consider what is fair and reasonable. Once these charges have been approved, the charges are included in the applicant’s ‘Standard Customer Contracts’ (SCC) which are binding on every property owner in the Territory. The property owner is not required to sign the SCC.
45.The SCC sets out the standard terms on which the applicant supplies water services and sewerages services to customers in the ACT. The ICRC approves not only the terms of the SCC, but also the fees and charges and the manner in which they are applied. Clause 6.3 of the SCC provides that the applicant may charge a customer a supply charge for making water services and sewerage services available. Mr Taleski submitted that there is an intertwining between the SCC and the definitions in the legislation.
46.The applicant is required to implement the terms and charges which the ICRC has approved and determined and which are set out in the SCC. Pursuant to section 92(2) of the Utilities Act, the terms of the SCC, which include the charges in the Schedule, constitute an enforceable contract between the parties, in this matter the applicant and the respondent.
47.As a property owner the SCC mandates that the respondent must pay the applicant for the supply and consumption of water services and sewerage services to his premises, the units, from the date of transfer of ownership of the premises to him.
48.The respondent is liable to pay the fees and charges irrespective of whether active connections exist between the Water and Sewerage Networks and the units.[5] It is irrelevant that the respondent has not connected his units to those services.
[5] Applicant’s submissions v.1.2 at [24]
49.Mr Taleski submitted that the question for the Tribunal is not whether the units are using these services; the question is – do the units have access to these services or, expressed another way, are the applicant’s water services and sewerage services ‘available’ to the respondent? He submitted that the Tribunal should apply the ordinary meaning of ‘available’.
50.Mr Taleski submitted that the applicant has made available to the respondent Water Supply Services, Water Consumption and Sewerage Services as defined in the Utilities Act 2000 (Utilities Act)[6] and the making of a Water and Sewerage Network for the provision of services available to the respondent satisfied the relevant definitions under the Utilities Act.[7]
[6] Sections 11(b) and 13(b) of the Utilities Act
[7] Applicant’s submissions v.1.2 at [23]
51.Mr Taleski further submitted that the applicant had satisfied its obligation to make access to the network available to the respondent’s units by installing its infrastructure to the connection points on the boundary. This is shown in the Icon Sewerage Network map and the Icon Water Network map annexed to Jeremy Jackson’s witness statement.[8] The applicant cannot do anything more in respect of availability beyond providing connections to the connection point of UP 328. It is the obligation of the respondent and UP 328 to install and maintain the connections between the units and the relevant connection points.
[8] Annexures JJ8 and JJ9
52.The fact that the respondent had not gone to the expense of installing the infrastructure from the connection points to his units or arranged for UP 328 to install this infrastructure does not mean that the respondent is not liable for the provisions of these services to the units.
53.In relation to the respondent’s submission that it is not fair to charge his units for access to these services, Mr Taleski submitted that the applicant does not have the power under the legislation to determine whether a charge is fair or not; these are considerations for the ICRC when determining the SCC terms and the charges.[9] As the ICRC has approved the terms of the SCC pursuant to section 89 of the Utilities Act it has already determined that the charges in the SCC are fair and reasonable. The SCC is binding on the applicant and the respondent.
[9] In the schedule of charges which forms part of the contract and must be read in conjunction with the contract
54.Vacant land and carparks are charged in a similar way because they have access to these services even though they do not typically use them.
55.In relation to Mr Stodulka’s reports Mr Taleski submitted that Mr Stodulka relied heavily on an analysis of 45 year old plans, which he, Mr Stodulka, conceded did not accurately reflect the current position and that Mr Stodulka had made no effort to review the relevant construction plans, other relevant plans or internal infrastructure of the building to determine what plumbing infrastructure was actually installed.[10]
[10] Applicant’s submissions v.1.2 at [22]
56.Further, Mr Stodulka conceded in his second report that he had concluded that the “infrastructure could only be reasonably be deemed to be available to the subject premises at exorbitant cost and disturbance to the other unit holders if at all possible.” The applicant submitted that Mr Stodulka’s use and reference to the word ‘available’ in that report is inconsistent with the provisions of the Utilities Act and the language used in the SCC and that most unit title connections to the sewer and water network are costly and encroach on property other than the relevant units in the UP, whether that be common property or other units.
57.In relation to the respondent’s submission that the Tribunal should apply the definition of ‘availability’ in the applicant’s Water and Sewerage and Installation Rules on the Icon website (Rules) Mr Taleski submitted that the Rules are an internal ICON document for use when there is no definition in the legislation.[11]
[11] The Rules, Section 1.2 – The service and installation principles and rules contained in this document must in no way negate the condition defined in any law, regulation or utility code, unless those laws, regulations or utility codes expressly permit an alternative at the discretion of the utility.
58.The manner in which the legislation operates is that it permits the applicant to charge the unit owner a supply charge for making water and sewerage available to each of the units even if these services are not connected to the units. This represents a charge for the units having access to the applicant’s network which it owns and manages. An active connection is not required for a unit owner to be liable to pay the supply charge.
Respondent’s submissions
59.The respondent submitted that the units have not received or used water as they are not physically connected to the applicant’s Water and Sewerage Network; a Water or Sewerage service has not been made available for the provision of water and sewerage services to the units and such services have not been supplied to the units.
60.The respondent referred the Tribunal to the applicant’s Rules[12] and submitted that the definition of ‘availability’ in the Rules should be applied by the Tribunal.
[12] Rule S2 and Rule W2
61.The respondent told the Tribunal that the occupants of the units use the kitchen and toilet facilities located in the common area.
62.Although Mr Stodulka did not give evidence at the hearing the respondent relied on the following statements in Mr Stodulka’s first report dated 5 December 2017:
…for the parcels of land known as Unit 35, 36, 37 and 38 of Units Plan 328, the water and sewerage network is not available for connection to that network. The water network terminates in the middle of the common property. The sewerage network terminates in the middle of the common property. There is no terminating water or sewerage network available to the parcels of land identified as Unit 35, 36, 37 and 38.
63.The respondent also referred to and relied on the following questions he had posed to Mr Stodulka after the hearing and Mr Stodulka’s answers which are set out in Mr Stodulka’s second report dated 16 April 2018:
11. Have you formed any opinion to determine what plumbing infrastructure has actually been installed and the possibility and practicability of connecting infrastructure with icon water infrastructure?
Yes. In my opinion there is no provision for any connections for water or sewerage supply to the subject premises. Based on the original plans there was never any intention then or in the future for the subject premises to be connected to the infrastructure of water and sewerage. I further draw the conclusion it would be impracticable and nearly impossible to connect to the network due to the architectural features of the building
…
13. In your expert opinion do you believe that a water or sewerage utility service has been made available to the Subject Premises?
No. Within all practical purposes the utility service is not available to the subject premises.
…
17. In what way has your review of the above rules and regulations [Standard Water Contracts, Service Installation Rules and Network Boundary Code] assisted you in reaching your conclusion?
In reading the above instruments I note that the key element is “AVAILABILITY”. I concluded without any doubt that the Icon Infrastructure could only be reasonably be (sic) deemed to be available to subject premises at exorbitant cost and disturbance to the other unit holders if at all possible.
64.The respondent submitted that the terms of the SCC as currently in force are not fair and reasonable. He posed the question “Is it fair and reasonable to pay for something I do not have or use?” He also submitted that it is not fair that he pay for the common property using these facilities through unit levies and that he also pay for toilets and water he does not have in his units.
65.The respondent also submitted that the ICRC did look at the issue concerning supply of these utilities and made a change for the 2017/2018 year by reclassifying the relevant parcels of land from class 3 unit title to class 6 unmetered and unconnected charges from 1 July 2016,
66.The respondent referred the Tribunal to sections 84 and 86 of the Utilities Act, which require, on application by a person for any of the named utility services, that the applicant provide the service in accordance with the utility’s SCC by connecting the premises to which the application relates, in relation to water services, by supplying the water to the premises owned or occupied. In relation to a sewerage connection service the applicant must provide the service in accordance with the SCC by connecting the premises to the utility’s network or by varying the capacity of the connection between the premises and the utility’s network.
67.The respondent said that he had applied for these connections approximately three years ago; the applicant had not provided them so how can the applicant overcome sections 84 and 86 of the Utilities Act and charge him when they had not complied.
68.The respondent also submitted that the applicant’s conduct was unconscionable.
The third party’s submissions
69.The third party did not call any evidence or make any oral or written submissions.
Issues
70.The following issues have arisen:
(a)Has the applicant made available to the respondent’s units Water Supply Services, Water Consumption and Sewerage Services as defined in the Utilities Act 2000?
(b)Is it unfair that the respondent be required to contribute to the costs and charges of the applicant’s Water and Sewerage Network where the units’ use is limited?
71.If the Tribunal finds that the respondent is liable for the payment of the charges, the respondent asks the Tribunal to determine if the Owners Corporation should provide the connections to the water and sewerage. The Tribunal will consider this as Issue (c).
Consideration
72.The applicant’s claim is for charges payable by the respondent for Water Supply Services and Sewerage Services provided in accordance with the provisions of the Utilities Act 2000 to the units.
73.The applicant submitted that it provides water and sewerage services in accordance with the definition in the Utilities Act to the respondent’s properties by making a water network available for the provision of water and sewerage connection services to the respondent’s units.[13]
[13] Statement of Ian McDonell dated 11 May 2018 at [17]
74.Part 2 of the Utilities Act refers to utility services. Sections 11 and 12 relate to water services and water network. Sections 13 and 14 relate to sewerage services and sewerage network. Pursuant to section 11(b) of the Utilities Act, making a water network available for the provision of water connection services is a utility service. Section 11(c) provides that a water connection service is a utility service. Pursuant to section 13(a) of the Utilities Act making a sewerage network available for the provision of sewerage connection services is a utility service and a sewerage connection service (section 13(b)) is a utility service.
75.A ‘water network’ is defined in section 12 of the Utilities Act as:
12. Water network
(1) For this Act, a “water network” consists of the infrastructure mentioned in subsection (2) used, or for use, in relation to any of the following purposes:
(a) the collection and treatment of water for distribution by a person to premises of another person;
(b) the distribution of water by a person for supply to premises of another person.
(2) For subsection (1), the infrastructure consists of the following:
(a) water storages, mains and treatment plants;
(b) pumps, facilities and equipment for distributing water, or monitoring or controlling the distribution of water;
(c) pipes or equipment;
(d) any other thing ancillary to any other part of the infrastructure.
(3) A “water network” does not include infrastructure that is outside the network boundary.
76.A ‘sewerage network’ is defined at section 14 of the Utilities Act as:
14. Sewerage network
(1) For this Act, a “sewerage network” consists of the infrastructure mentioned in subsection (2) used, or for use, in relation to the provision of sewerage services by a person to premises of another person.
(2) For subsection (1), the infrastructure consists of the following:(a) sewage storages, trunk sewers, mains and treatment plants;
(b) pumps, facilities and equipment for conveying sewage, or monitoring or controlling the conveyance of sewage;
(c) pipes or equipment;
(d) any other thing ancillary to any other part of the infrastructure.
(3) A “sewerage network” does not include infrastructure that is outside the network boundary.
77.There is no dispute that UP 328 is connected to and accesses the Water and Sewerage Network. The common property in UP 328 uses these services.
78.The applicant provides the Water and Sewerage Services in accordance with the terms set out in the SCC in accordance with Division 6.2[14] of the Utilities Act. Section 87 of the Utilities Act provides:
87Terms
(1)For this Act, the terms of a standard customer contract for the provision of a utility service by a particular utility are the terms of the contract, as approved or determined from time to time under this division, for the provision of the service by the utility.
(2)A standard customer contract—
(a)may apply to 2 or more stated utility services; or
(b)may set out different terms for different classes of utility services.
[14] Sections 86A – 94
79.The provisions for the determination and approval of the terms of a SCC by the ICRC are found in sections 88, 89 and 90 of the Utilities Act. Section 91 of the Utilities Act provides that the terms of a standard SCC is a notifiable instrument. A SCC varied under section 93 of the Utilities Act is also a notifiable instrument.
80.Subsection 89(2) of the Utilities Act refers to the approval of the terms of the SCC and provides:
89Approval of terms
…
(2)ICRC may approve the terms of a standard customer contract only if satisfied that, when in force as a standard customer contract—
(a)the terms would be consistent with—
(i)the conditions of the utility’s licence; and
(ii)the requirements imposed by or under this Act or a related law, including in particular, the requirements of each industry code and technical code that is applicable; and
(b)the charges payable under the contract would be consistent with the relevant price direction by ICRC; and
(c)the terms would be fair and reasonable.
…
81.The SCCs in this matter have been approved by the ICRC under section 89 of the Utilities Act.
82.Section 92 of the Utilities Act refers to the creation of standard customer contracts. Section 92(1)(b) and section 92(2) relevantly state:
92Creation of standard customer contracts
(1)The terms on which a utility may provide a utility service to a person are—
(a)to the extent that the service is provided under a negotiated customer contract—the terms of the contract; or
(b)in any other case—the terms of the standard customer contract for the provision of the service by the utility that apply—
(i)when the person applies to the utility for the service on those terms; or
(ii)when the service is provided by the utility to the person in the absence of an application by the person.
(2)Where subsection (1) (b) applies, the terms of the standard customer contract constitute an enforceable contract between the utility and the person for the provision of the service.
(3)A standard customer contract—
(a)has no effect in relation to anything occurring before it comes into operation; and
(b)is subject to any variation under section 93; and
(c)is unenforceable by the relevant utility to the extent (if any) to which it does not comply with the requirements set out in section 89 (2) (a) and (b).
83.The applicant submits and the Tribunal agrees that, as a consequence of subsection 92(2) of the Utilities Act, the applicant and the respondent are bound by the terms of the SCC which are enforceable irrespective of whether either party has agreed to such terms.[15] The respondent is not required to sign the SCC.
[15] Applicant’s submissions (v. 1.2), page 7, at [29]
84.Before considering the terms of the SCCs the Tribunal will consider the respondent’s allegation that the applicant’s conduct was unconscionable.
85.In considering the respondent’s submission, the Tribunal was assisted by Sam Sachse’s witness statement and Mr Taleski’s submissions. Mr Sachse is the applicant’s Chief Financial Officer. His role involves oversight of the preparation of submissions to the ICRC on behalf of the applicant in relation to their tariff review. He was the chair of the applicant’s project board which oversaw the preparation and submission to the ICRC for the 2018 – 2023 pricing direction. He has a Bachelor of Accountancy, Master of Applied Finance, is a Fellow of CPA Australia and a Graduate of the Institute of Company Directors.
86.The ICRC is established under the Independent Competition and Regulatory Commission Act 1997 (ICRC Act). Section 7 of the ICRC Act sets out the ICRC’s objectives:
7. The commission has the following objectives in relation to regulated industries, access regimes, competitive neutrality complaints and government-regulated activity:
(a) to promote effective competition in the interests of consumers;
(b) to facilitate an appropriate balance between efficiency and environmental and social considerations;
(c) to ensure non-discriminatory access to monopoly and near-monopoly infrastructure.
87.Section 19L of the ICRC Act sets out its objectives, when making a price direction in respect of water and sewerage services:
The objective of the commission, when making a price direction in a regulated industry, is to promote the efficient investment in, and efficient operation and use of regulated services for the long term interests of consumers in relation to the price, quality, safety, reliability and security of the service.
88.The Utilities Act provides a framework under which the ICRC, as regulator for competition and pricing, regulates certain aspects of the provision of utility services in the ACT. Section 3 of the Utilities Act sets out the following ICRC’s objects under that Act:
(a) to encourage the provision of safe, reliable, efficient and high quality utility services at reasonable prices;
(b) to minimise the potential for misuse of monopoly power in the provision of utility services;
(c) to promote competition in the provision of utility services;
(d) to encourage long-term investment, growth and employment in utility service industries;
(e) to promote ecologically sustainable development in the provision of utility services;
(f) to protect the interests of consumers;
(g) to ensure that advice given to ICRC by the ACAT is properly considered;
(h) to ensure the Government's programs about the provision of utility services are properly addressed;
(i) to give effect to directions of the Minister under section 19.
89.The ICRC sets the tariff structure of the applicant’s water and sewerage charges in accordance with its pricing principles that take into account the provisions of the ICRC Act, ACT Government Policy and the National Water Initiative Pricing Principles (NWIPP). The applicant provided the Tribunal with the NWIPP which were endorsed by the Natural Resource Management Ministerial Council on 23 April 2010.[16]
[16] Annexure ‘A’ witness statement Sam Sachse, 11 May 2018
90.The NWIPP were developed and agreed to by the Australian Government and all Australian States and Territories in 2004. The NWIPP were developed to:
(a)provide a set of guidelines or road map for rural and urban pricing practices; and
(b)to assist jurisdictions to implement the four NWI water pricing commitments in a consistent way.[17]
[17] Annexure ‘A’ witness statement Sam Sachse, 11 May 2018 at [10]
91.Mr Sachse set out the following two principles of the NWIPP at [12] and [13] of his witness statement:
[12]Principle 2 of the National Water Initiative Pricing Principles –Principles for Urban Water Tariffs provides:
Principle 2: Tariff Structures
10. Two-part tariffs (comprising a service availability charge and a water usage charge) should be used to recover the revenue requirement from retail residential and non-residential and bulk customers
Notes:
i. Unless this is demonstrated to not be cost effective.
ii. This does not preclude charging for peak capacity.
[13]Principal (sic) 4 of the National Water Initiative Pricing Principles provides:
Principal 4: Setting the service availability charge
12. The revenue recovered through the service availability charge should be calculated as the difference between the total revenue requirement as determined in accordance with Principle 1 and the revenue recovered through water usage charges and developer charges.
13. The service availability charge could vary between customers or customer classes, depending upon service demands and equity considerations. Unattributable joint costs should be allocated such that total charges to a customer must not exceed stand-alone costs or be less than avoidable cost where it is practicable to do so.
92.Mr Sachse further stated[18] that the applicant’s 2016-17 water tariff structure comprises a relatively low annual connection of supply charge and a two-tier variable usage charge based on the volume of water used and its annual fixed water supply charge[19] is among the lowest ($101 pa) compared to City West Water Melbourne ($228 pa), NT PowerWater ($293 pa), Queensland Urban Utilities ($192 pa), SA Water ($286 pa), South East Water Melbourne ($21 pa) and TasWater ($329 pa). The applicant’s annual supply charge exceeded Sydney Water ($90 pa) and Hunter Water ($26 pa).
[18] Witness statement Sam Sachse, 11 May 2018 at [16], [17]
[19] ICRC’s Final Report March 2017, executive summary page x, in 2016-17
93.Mr Sachse also stated:
18. The Applicant’s water usage charges are not based on economic measures of cost but have the effect of providing an ‘essential’ amount of water at a relatively low price, with higher levels of consumption charged at relatively high prices to provide incentives to conserve water.
19. With the current structure of the water tariff, the Applicant recovers about 10 percent of its water revenue from the supply charge and the remaining 90 percent from usage charges.
20. The Applicant’s water cost structure comprises over 80 per cent fixed costs that do not vary with changes in water consumed. The infrastructure component of costs is around 50 per cent of total costs and these costs are sunk in the sense that they cannot be used for another purpose.
21. The Applicant’s current sewerage tariff structure comprises an annual supply charge for residential premises, and the same supply charge plus an annual charge per flushing fixture (in excess of two) for non-residential premises.
22. The Applicant does not meter sewerage.
94.The Tribunal noted Mr Sachse’s evidence that the ICRC undertook a detailed review of the applicant’s tariff structure 2016-2017 for regulated water and sewerage services. In its final report dated 31 March 2017 it stated:
The tariff structure refers to the relative importance of fixed supply and volumetrically based usage charges for water and sewerage services. The mix of charges can have important effects on the ability of Icon Water to recover its efficient costs as well as the incentives for customers to use water and sewerage infrastructure and the water resource itself efficiently.[20]
[20] Foreword to ICRC Report March 2017 and Exhibit SS1 to witness statement of Sam Sachse dated 11 May 2018
95.The final report did “not specify any change at this stage.”[21]
[21] Ibid
96.The executive summary of the ICRC’s final report also states:
· The [Applicant’s] usage charges are not based on economic measures of cost but have the effect of providing an ‘essential’ amount of water at a relatively low price[22], with higher levels of consumption charged at relatively high prices to provide incentives to conserve water.[23]
· With the current structure of the tariff, Icon Water recovers about 10 per cent of its water revenue from the supply charge and the remaining 90 per cent from usage charges.
· This structure compares with Icon Water’s cost structure, which comprises over 80 per cent fixed costs that do not vary with changes in water consumed. The infrastructure component of costs is around 50 per cent of total costs and these costs are sunk in the sense that they cannot be used for another purpose.[24]
[22] $2.61 per kL for the first tier
[23] $5.24 per kL for the second tier
[24] ICRC’s Final Report March 2017 executive summary page ix – Exhibit SS1 to witness statement Sam Sachse dated 11 May 2018
97.The applicant does not meter sewerage. The executive summary of the ICRC’s final report states:
Sewerage services tariff structure
Icon Water’s current tariff structure for sewerage services comprises an annual supply charge for residential premises, and the same supply charge plus an annual charge per flushing fixture (in excess of two) for non-residential premises.[25]
…
Summary of Proposals
In summary the Commission proposes:
·To retain the existing water tariff structure with a fixed supply charge and a two-tier inclining block usage charge for the next regulatory period (1 July 2018 to 30 June 2023), but take the opportunity to rebalance the components to better reflect costs in future tariff determinations, while taking account of social and environmental objectives and relevant government policies;[26]
·…
[25] Ibid at page xxi
[26] Ibid at page xxii-xxiii
98.The Tribunal accepted Mr Sachse’s unchallenged evidence in relation to the role of the ICRC in regulating competition and pricing and licensing utility services in the ACT. The Tribunal also agreed with Mr Taleski’s submissions in [42] to [45] above. The respondent did not call any evidence which may have assisted the Tribunal in considering his submission that the applicant’s conduct was unconscionable.
99.For these reasons the Tribunal is not satisfied that there is any merit in the respondent’s submission that the applicant’s conduct was unconscionable.
100.The Tribunal will now consider the terms of the SCC, which, in accordance with section 92(2) of the Utilities Act, constitutes an enforceable contract between the applicant and the respondent.
101.Clause 2 of the Terms of the SCC sets out the customer’s obligations. A home owner does not need to lodge an application for supply with the applicant. Clause 2.1 states:
If you are the owner of the premises, you do not need to lodge an application for supply with us. We will be notified of your details by the Registrar-General’s Office when you acquire the premises.
102.Clause 6.1 of the SCC[27] provides that the applicant’s charges for water services and sewerage services are shown in the schedule of charges which forms part of the terms of the contract and must be read in conjunction with the contract.
[27] The 2013, 2014, 2015 and 2016 SCCs – Exhibit A1, statement of Jeremy Jackson, attachments JJ-10, JJ-11, JJ-12, and JJ-13; The 2017 SCC – Exhibit A2, statement of Steven Taleski, Annexure A
103.The 2013 SCC included an ‘unconnected charge’ at clause 4.5 which stated:
This charge applies to a parcel of land that is not connected to the water supply network, but where water supply infrastructure has been installed and is available to supply water to the land.
104.From 1 July 2014 the SCC included clause 6.3 which provides:
We may charge you a supply charge for making water and sewerage services available to your property even if water and sewerage services are not connected at your property, including but not limited to vacant land and carparks. This is a charge for your property having access to our water and sewerage network.[28]
[28] Witness statement Ian McDonell 11 May 2018 [10]
105.This clause is consistent with the definition of Water Services and Sewerage Services in sections 11 and 13 of the Utilities Act which extends the definition of Water Services and Sewerage Services to include making a water or sewerage network available for the provision of water or sewerage service. The SCC dictionary adopts the definition of Water Services and Sewerage Services in sections 11 and 13 of the Utilities Act.
106.The applicant relies on clause 4.5 and clause 6.3 as authority permitting the applicant to charge the respondent a supply charge for making Water and Sewerage Services available to the units even if these services are not connected to the units. It is a charge to the units for having access to the applicant’s water and sewerage network.
107.Clause 2.3 of the SCC provides:
We can only supply you if you have connections that are in working order between your premises and the water networks and sewerage networks …
108.‘Connection point’ is defined in the Schedule 2 of the SCCs as:
The boundary between the water network or sewerage network and your equipment, as defined in the Water & Network Boundary Code, or as otherwise agreed with you in writing.
109.Mr McDonell annexed an ‘Icon Water Network Map’ and an ‘Icon Sewer Map’ for UP 328 to his witness statement. These maps indicated that a water and sewer network is available for the provision of water and sewerage connection services to UP 328 and the units which are located on UP 328.[29]
[29] Ibid, annexures B and C
110.The Tribunal noted that the respondent’s expert, Mr Stodulka, stated in his first report:
I confirm the water and sewerage network is available to the common property parcel of land of the Units Plan on level 1, … the [water and sewerage] network(s) terminates in the middle of the common property
111.While Mr Stodulka had also stated that there was no terminating water or sewerage network available to the parcels of land, which are the units the subject of this application, it is clear from the statement in the previous paragraph that he conceded that water and sewerage connections are available for the provision of water and sewerage connection services to UP 328 as they are being used in the common area.
112.In considering whether or not the services are ‘available’ to the respondent’s units it is necessary to take into consideration the provisions in the Unit Titles (Management) Act 2011 (UTMA), the Unit Titles Act 2001 (UTA), the Water and Sewerage Network Boundary Code[30] (Code) and the boundary provisions set out in clause 2.14 of the 2014, 2015, 2016 and 2017 SCCs and Clause 2.15 of the 2013 SCC. The boundary provisions in the SCC state:
The boundary between your equipment and our water and sewerage network is the designated connection point described in the Water & Sewerage Network Boundary Code, or as otherwise agreed with you in writing. You are responsible for your equipment on your side of the connection point and we are responsible for equipment on our side.
[30] Exhibit A3, at annexure A
113.‘Your equipment’ is defined in Schedule 2 of the 2013 SCC as:
the water and sewerage pipes and associated equipment at the premises on your side of the connection point
114.The 2014, 2015, 2016 and 2017 SCCs define ‘your equipment’ as:
includes water and sewerage pipes and other water and sewerage infrastructure and equipment.
115.‘Connection point’ is defined in Schedule 2 of the SCCs as:
The boundary between the water network or sewerage network and your equipment, as defined in the Water & Sewerage Network Boundary Code, or as otherwise agreed with you in writing.
116.Clause 3.2 of the Code refers to the boundary between the water utility’s network and a customer’s premises and provides:
4.2 Boundary between Water Utility’s Network and Customer’s Premises
(1) The connection point between the water connection pipe of the Water Utility and the plumbing system of the Customer is the designated boundary. This is typically the outlet to the first isolating valve inside of the lease boundary where such a valve is in close proximity (1 metre) to the lease boundary.
(2) The Meter and the threads on the Meter will remain the property of the Water Utility, irrespective of their location on the Customer’s water pipes.
(3) Whilst the above definition will cover most situations in the Territory there are some exceptions that need further description:
(a) where the isolating valve occurs outside of the Customer’s Premises, the Water Utility will take responsibility for any work required outside of the Premises, whilst the Customer will take responsibility for any work inside of the Premises;
(b) where there is no isolating valve or the first isolating valve that occurs is not within close proximity to the Customer’s boundary, the Water Utility may install such a valve at the Customer’s expense;
(c) where no lease boundary exists, or for specific applications such as irrigation of ovals, parks, gardens overhead filling points etc, the boundary will be defined through written agreement between the Customer and the Water Utility with the agreement of the Technical Regulator and advised to the ICRC;
(d) where the water connection to the Customer’s Premises occurs through another Person’s Premises, the boundary is the outlet of the isolating valve in close proximity to the upstream Premises closest to the Watermain, with that Person assuming responsibility for the connection that traverses through their Premises; and
(e) where a Customer’s water plumbing system serves a number of Premises, the point of supply to all the Premises is to the upstream Premises closest to the Watermain.
117.Clause 4.2 of the Code refers to the boundary between the sewerage network and a customer’s premises and provides:
4.2 Boundary between Sewerage Network and Customer’s Premises
(1) The connection point between the sewer connection pipe of the Sewerage Network and the house drainage system of the Customer is the designated boundary. Typically this is the collar immediately downstream of the last Inspection Opening (IO) on the Household Drains. This is usually known as the Designated Connection Point and is defined in terms of both distance and depth on the approved drainage plan.
(2) Whilst the above definition will cover most situations in the Territory there are some exceptions that need further description:
(a)where this Designated Connection Point occurs outside of the Customer’s Premises the Sewerage Utility will take responsibility for any work required outside of the Customer’s Premises whilst the Customer will take responsibility for any work inside of their Premises;
(b)where the Sewerage Utility decides that the Designated Connection Point is outside of the Customer’s Premises, it may relocate that connection point to bring it back into the Customer’s Premises;
(c)where the sewer connection to the Customer’s Premises occurs through another Person’s Premises then the Designated Connection Point remains as described at, or near the boundary of the first or downstream Premises, with the owner of those Premises assuming responsibility for the connection that traverses through their Premises; and
(d)where a Customer’s drainage system serves a number of Premises, the point of collection to all the Premises is to the downstream Premises closest to the network Sewermain.
118.Mr McDonell stated in his witness statement that the connection points (and meters) for unit title properties are ordinarily located on the boundary of the units plan and each unit of the units plan ordinarily shares connection points and meters with the units plan and other unit owners. While he also said that, as a result, the applicant will ordinarily invoice the units plan for water consumption and not the individual units and the unit plan would then apportion the consumption charges to the relevant unit owners,[31] the charges in the present matter are not for water consumption, but for the supply of the utility networks to the units.
[31] Ian McDonell witness statement 11 May 2018 at [29]
119.Mr McDonell annexed two photographs (D and E) of the connection points on UP 328 and two photographs (F and G) giving an indication of the location of the connection points in reference to UP 328. Photograph D clearly showed a connection in the footpath abutting UP 328 property. Photographs E, F and G show the location of the connection point and a shut off valve which states that it feeds “the whole of the Fyshwick Plaza” on the units plan property abutting one of the external walls of one of the 24 units located towards Wollongong Street in the single level buildings in a ‘U’ shape around the hexadecagon building. This connection point is on the side of the building facing the building in which the respondent’s units are located.
120.The respondent referred the Tribunal to the Rules. Relevantly, Mr Taleski drew the Tribunal’s attention to Section 1.2 of the Rules which states:
The service and installation rules have been developed as a requirement of the Water and Sewerage Service and Installation Code (December 2000).
…
The service and installation principles and rules contained in this document must in no way negate the condition defined in any law, regulation or utility code, unless those laws, regulations or utility codes expressly permit an alternative at the discretion of the utility.
121.The Tribunal is satisfied and finds that the Rules are an internal ICON (formerly ACTEW) document for use only where there is no definition in the relevant legislation. In this matter the legislation and code provide the necessary definitions.
122.The Tribunal has noted that Principles 8, 9 and 16 of the Rules relevantly state:
Principle 8:
The boundary between ACTEW’s water network and the plumbing system of a customer’s premises shall be the designated connection as defined in the Water and Sewerage Network Boundary Code, unless otherwise agreed under the conditions of a non-standard customer contract.
Principle 9:
The boundary between ACTEW’s sewerage network and the sanitary drainage system of a customer’s premises shall be the designated connection as defined in the Water and Sewerage Network Boundary Code, unless otherwise agreed under the conditions of a non-standard customer contract.…
Principle 16:
All costs associated with the creation, relocation, alteration, augmentation, relocation or removal of a connection must be borne by the customer.
…
123.Rules S2 in section 3 and W2 in section 4 of the Rules refer to approval of an installation of new connections or modification of an existing connection on the condition that the existing network is close enough to permit a viable connection to be designed and constructed. The respondent urged the Tribunal to find that, in this matter, the existing networks were not close enough to permit a viable connection to his units.
124.Mr McDonell stated that based on his experience in working for Icon Water, approvals are provided where services are located at the boundary of the property.[32]
[32] Ibid at [32]
125.Mr McDonell annexed his curriculum vitae to his witness statement. He has been employed by the applicant as Acting Team Leader of Developer Services for nine months. In this role he manages a team of technical officers and works inspector providing design acceptance and construction against Icon Water standard and approved material. He has worked for the applicant since 1995. Between 1995 and 2016 he was an Hydraulic Asset Acceptance – Senior Technical Officer and in 2016 he was Team Leader Building Services for the applicant, managing access requirements for the future maintenance of Icon Water Assets. His professional qualifications include Architectural Drafting and Civil, Electrical, Mechanical and Structural Drafting. His qualifications and experience are impressive.
126.The respondent relied on the two reports from Mr Stodulka, whom he referred to as his expert. As Mr Stodulka did not attend the hearing he was not cross examined. The Tribunal was left with only having his two written reports to consider.
127.While Mr Stodulka stated in his first report that he had “examined relevant plans” and in his second report that he had viewed the current plans of the building which were provided by the applicant in these proceedings, he did not detail any examinations, tests or other investigations which he relied on.
128.It was not readily apparent to the Tribunal, from the available evidence, why Mr Stodulka had, apparently, made no effort to review relevant construction plans, other relevant plans or internal infrastructure of the building to determine what plumbing infrastructure he actually could inspect. Photographs may have assisted the Tribunal too.
129.Mr Stodulka stated in his second report that he had read the Expert Witness Code of Conduct Procedural Directions 2009 (No.1) however he did not specify in the report or annex his qualifications as an expert. The Tribunal noted that he did state in the report’s valediction that he was the Managing Director of Design Construct Industries Pty Ltd, Structural and Construction Consultants, a member of the Institute of Engineering, a Chartered Professional Engineer, a registered professional engineer in Queensland and that he has a M.Eng.Sc.(Hydraulics) from Sydney University. The valediction also included AMICE. He did not, however, set out any information relating to his experience which may have helped the Tribunal in considering his report. The Tribunal noted that order 1(b) of the Tribunal on 5 February 2018 required Mr Stodulka to set out his experience. The respondent should have ensured that Mr Stodulka complied with this order.
130.Mr Stodulka stated in his second report – “there is no doubt that there was no plumbing connection provision installed during the construction of the units for any function of the subject premises.” However, the Tribunal noted that Mr Stodulka relied on his analysis of 45 year old plans to form this conclusion and he admitted that these plans do not accurately reflect the current position. He acknowledged that the ground floor layout had changed from the 45 year old plans when he stated that:
…the current position of the ground floor unit layout is such that there is no common area and the units have encroached into the wet area central core. The parcel of land of the units on the ground floor now each have exclusive availability and access to the wet area central core to the exclusion of other unit holders or general public. I conclude that this was not the intention of the original development.[33]
[33] Andrea Stodulka 16 April 2018 report at page 2
131.While the Tribunal was not aware from the evidence when the changes were made to the units on the ground floor of the building in which the respondent’s units are located the fact that the ground floor units now have exclusive availability and access to the wet area central core shows that the original plans have been changed. Mr Stodulka had concluded that the current layout of the ground floor units “was not the intention of the original development.”
132.This statement negatively impacts on what weight the Tribunal should place on Mr Stodulka’s opinion that – “there is no provision for any connections for water or sewerage supply to the subject premises. Based on the original plans there was never any intention then or in the future for the subject premises to be connected to the infrastructure of water and sewerage.”[34]
[34] Mr Stodulka’s second report dated 16 April 2018 at [11]
133.The Tribunal also noted that Mr Stodulka stated in his second report at [11]:
“I further draw the conclusion that it would be impracticable and nearly impossible to connect the network [to the respondent’s units] due to the architectural features of the building.”
134.While the applicant acknowledged that the respondent would experience difficulty in connecting to the water and sewerage network, Mr Taleski submitted that any such difficulty does not absolve the respondent from liability in respect of payment of the fees and charges claimed. Mr McDonell stated:
(i) Every connection to the water and sewerage network involves cost, difficulty and relative complexity[35];
and
(ii) Most Unit Title connections to the sewer and water network are costly and encroach on property other than the relevant units in the Unit Plan, be it common property or other units. This is a feature commonly associated with Unit Title property and for such reasons connections are ordinarily installed during the construction of the relevant buildings.[36]
[35] Ian McDonell’s witness statement 11 May 2018 at [34]
[36] Ian McDonell’s witness statement 11 May 2018 at [37]
135.Mr McDonell said of Mr Stodulka’s following comments in respect of ‘availability’ in the Rules and regulations:
I concluded without any doubt that the Icon infrastructure could only be reasonably be deemed to be available to subject premises at exorbitant cost and disturbance to the other unit holders if at all possible.
that Mr Stodulka’s use and reference to the word ‘availability’ is inconsistent with the provisions of the Utilities Act and the language used in the SCC. The Tribunal agrees.
136.Mr Stodulka further stated in [17] of his second report:
Further of note is that any attempted connection (no matter the exorbitant cost and impracticability of the undertaking of such an endeavour) would not comply with Rule S2 or W2 of the Service Rules because the ‘existing network is not close enough to permit a viable connection’.
137.Mr Stodulka’s opinion is at odds with Mr McDonell’s opinion and statements above. Based on Mr McDonnell’s qualifications and experience the Tribunal had no hesitation accepting his expert opinion. Where the evidence of Mr Stodulka and Mr McDonell differed, the Tribunal preferred Mr McDonnell’s detailed evidence.
138.The Tribunal is satisfied and finds that the connection of UP 328 to the water and sewerage network demonstrates that not only is the water and sewerage network close enough to permit a viable connection to the units, a connection exists to UP 328.
Conclusion – Issue (a) and Issue (b)
139.Having considered all of the evidence, the documents and the submissions and for the above reasons the Tribunal adopts the applicant’s submissions[37] and is satisfied and finds:
[37] Witness statement Sam Sachse 11 May 2018 at [24] – [29]; witness statement Ian McDonell 11 May 2018 at [40] – [47]
(a)the applicant provides water and sewerage services in accordance with the provisions in the Utilities Act to the respondent’s units by making a network available for the provision of water and sewerage connection services to the respondent’s units and the UP 328;
(b)the applicant has provided active connection points in close proximity to the boundary to UP 328 as shown in the Water and Sewerage Network Plans being Annexures B and C and in the photographs being Annexures D, E, F and G to the witness statement of Mr McDonell. The applicant has complied with Rules S2 and W2 of the ACTEW Corporation Water and Sewerage service and Installation Rules;
(c)UP 328 has accessed the applicant’s connections and in doing so demonstrated that the applicant has made a water and sewerage network available for connection to the property where the respondent’s units are located.
(d)It is not a defence to the applicant’s claim to say that the respondent is not liable for the payment of the fees and charges claimed as his units are not connected to the network. Any impediment to connection is a matter between the respondent as the owner of the units and the units plan. It is the obligation of the respondent and UP 328 to install and maintain connections between the respondent’s units and the relevant connection points provided by the applicant;
(e)the applicant is not responsible for connections within the common property beyond the relevant connection points on UP 328; the connection points must terminate at the boundary as applicant cannot build on the respondent’s property, or the property of anyone else;
(f) the design of the building in which the respondent’s units are located is not unique in so far as it contains units with no connection to the water and sewerage network. This is a design commonly featured in commercial premises where utilities and kitchen facilities located on common property are shared by multiple units;
(g)the intention of the Utilities Act and the ICRC is that all property owners that have access to the water and sewerage network should contribute to the cost of the network;
(h)should the ICRC have intended that commercial units, such as the units owned by the respondent, would not be liable to pay the fixed water and sewerage supply charges, this would have been explicitly stated in the SCC and Schedule of Fees;
(i)as a property owner, the respondent should contribute towards the cost of essential infrastructure along with other property owners in accordance with the fees and charges approved by the ICRC and contained in the SCC;
(j)the pricing set by the ICRC is based on calculations that take into consideration the number of properties serviced by the applicant’s water and sewerage network so that charges can be fairly apportioned across all property owners. The applicant’s overall pricing is largely based on a cost recovery basis consistent with ‘National Water Initiative Pricing Principle 1: Cost Recovery’;
(k)it is fair that the respondent, as the owner of property in the Australian Capital Territory, be required to contribute to the costs and charges of the applicant’s Water and Sewerage Network as determined by the ICRC and included in the SCC.
Quantum of Charges
140.The quantum of the applicant’s charges in the application was not in dispute. Nevertheless, the Tribunal has considered the available evidence in relation to how the applicant’s water and sewerage charges were determined.
141.This evidence was provided by Sam Sachse, the applicant’s Chief Financial Officer for four years, in his witness statement dated 11 May 2018. The Tribunal has set out Mr Sachse’s qualifications at [85] above. Mr Sachse stated in his Witness Statement that he had read the ACT Civil and Administrative Tribunal Expert Witness Code of Conduct and the documents filed in this application.
142.The respondent did not call any evidence in relation to the determination of the charges or the quantum of the charges. The Tribunal accepted Mr Sachse’s evidence in his Witness Statement.
143.The Tribunal is satisfied and finds that the ICRC sets the applicant’s water and sewerage charges in accordance with its pricing principles that take into account the provisions of the Independent Competition and Regulatory Commission Act 1997 (ICRC Act), ‘ACT Government Policy and the National Water Initiative Pricing Principles’.
144.The Tribunal noted that the respondent had informed the Tribunal (see [66] above) that he had applied for water and sewerage connections approximately three years ago. Mr Taleski submitted and the Tribunal agrees that the respondent would have been required to lodge plans with such an application. The respondent did not provide the Tribunal with a copy of any application with or without any accompanying plans. Without this documentation it is open to the Tribunal to find that, if the application and or the plans do exist, they do not support the respondent’s evidence. As the evidence stands before the Tribunal, the Tribunal cannot be satisfied that sections 84 and 86 of the Utilities Act assist the respondent.
Conclusion
145.For the reasons set out above, the Tribunal is satisfied and finds that the applicant has made ‘available’ a water network for the provision of water connection services to the applicant’s units. A service is provided to the connection point and the network is available because there is a connection point. The water network provides the distribution of water for ‘supply’ to the respondent’s units, as defined in section 12 of the Utilities Act.
146.The Tribunal is also satisfied and finds that the applicant has made ‘available’ a ‘sewerage service’ as defined in section 13(a) and in section 14(1) of the Utilities Act because the applicant has provided the connection point for the provision of sewerage services, to the respondent’s units.
147.The Tribunal is satisfied and finds, as a consequence of section 92(1)(b) and section 92(2) of the Utilities Act the applicant and the respondent are bound by the terms of the SCC. The SCC is an enforceable contract. The respondent is not required to agree to the terms or to sign any SCC. For these reasons the Tribunal finds that there is no merit in the respondent’s argument that no contract exists because he had not entered into an agreement.
Issue (c)
148.In relation to this issue raised by the respondent, the Tribunal noted the statement by Mr Stodulka in the second report that the applicant’s infrastructure could be deemed to be available to the units but only “at an exorbitant cost and disturbance to the other unit holders, if at all possible.”
149.Part 4, Division 4.2 of the UT Act refers to easements in unit title property. Sections 34 and 35 provide:
34. Unit title easement rights
This division applies to the following rights (unit title easement rights ) that the owner of a benefited estate may have against the owner of a burdened estate:
…
(b) rights to utility services, and to their provision by any reasonable form of utility conduit (including rights for the collection, passage and drainage of rainwater by encroaching eaves, gutters, downpipes or similar structures);
(c) all ancillary rights necessary to make the rights mentioned in paragraphs (a) and (b) effective, including a right of entry by the owner of the benefited estate at all reasonable times on the burdened estate for the inspection and maintenance of—
(i) any building on the estate; and
(ii) facilities for any utility service on the estate; and
(iii)any utility conduit on the estate.
Note Estate is defined in the dictionary as a unit or common property (in this context).
35. Easements given by this Act
(1) On and after the registration of a units plan, the owner of an estate (a benefited estate) has against the owner of another estate (the burdened estate) any unit title easement rights that are necessary for the reasonable use and enjoyment of the benefited estate.
(2) A unit title easement right under this section is an easement annexed to the benefited estate.
(3) An easement given by this section exists even if the same person is the owner of both the benefited and burdened estates.
(4) A person carrying out work in the exercise of a unit title easement right under this section must make good any damage done in carrying out the work.
Note Estate is defined in the dictionary as a unit or common property (in this context).
Conclusion
150.The respondent will need rely on these sections of the UT Act and to pursue this matter with the Owners Corporation for UP 328 and the other unit owners.
151.Having considered all of the evidence and the submissions, the Tribunal is satisfied and finds that the applicant is not responsible for connections within the common property beyond the relevant connection point on UP 328. The connection points for Blocks 48 to 50 Section 25, Fyshwick, on which the units are located, are shown on the Icon Water Network plan and the Icon Sewer Network plan annexed to the statement of Jeremy Jackson (Exhibit A1).[38] The connection points are located in close proximity to the boundary of UP 328.
[38] At pages 33 and 34
152.The applicant submits[39] and the Tribunal agrees that the applicant is under no obligation to provide a connection to the Water and Sewerage Network for the units across private land. This is a matter between the respondent, as the owner of the units, and the other relevant unit owners.
The charges
[39] Applicant’s submissions v. 1.2 at [50]
153.The applicant has issued quarterly invoices to the respondent in accordance with the rates set out in the schedule of charges in respect of the water supply and sewerage supply charges provided to the units.[40] The invoices were annexed to Jeremy Jackson’s witness statement. The respondent paid the invoices for the period 1 July 2013 to 10 December 2013 when his account balance was in credit $31.42. Thereafter the respondent did not pay any of the invoices which attracted interest from 1 January 2014. The quantum of the invoices the subject of the debt application of $7,695.68 was not in dispute.
[40] JJ19 to JJ69
154.The applicant also issued quarterly invoices to the Proprietors of Units Plan 328 for water consumption charges. Due to an administrative oversight the applicant has not been invoicing UP 328 with the sewerage supply charges. At the hearing Ms Farrelly told the Tribunal that, following the applicant’s investigation, UP 328 would be invoiced for the sewerage supply charges.
155.The applicant submitted that the manner in which the units have been charged and invoiced is consistent with the manner in which other unit title lots not connected to the applicant’s water and sewerage network across the ACT are charged and invoiced.
156.While the respondent did not challenge the actual charges for any of the financial years, the Tribunal has considered the evidence in the witness statement of Jeremy Jackson in relation to the Schedules of Charges. Mr Jackson gave evidence at the hearing which was not credibly challenged. The Tribunal accepts his evidence. The Tribunal adopts the following submissions of the applicant.[41]
[41] Applicant’s submissions v. 1.2 [51] – [80]; [82] – [85]
157.The Tribunal is satisfied and finds in relation to the 2013 charges[42]:
(a)the sewerage charges are payable pursuant to clause 1.6 ‘unconnected charge’ of the 2013 schedule of charges;
(b)clause 2.6 provides that where a parcel of land is subdivided into unit title lots, each unit comprises a separate parcel of land;
(c)alternatively, on the basis that the definition of ‘sewerage services’ includes “making a sewerage network available for the provision of connection services”, clause 2.6(c) provides that a non-residential unit is a class 5 parcel of land and sewerage charges for a class 5 parcel of land are payable pursuant to clause 1.5;
(d)references to supply of water charges include ‘or availability of supply’;
(e)water charges are payable pursuant to clause 3.6 ‘unconnected charge’ of the 2013 schedule of charges for each parcel of land;
(f)clause 4.5 provides that an unconnected charge applies to “a parcel of land that is not connected to the water supply network, but where a water supply infrastructure has been installed and is available to supply water to the land”;
(g)alternatively, on the basis that definition of ‘water services’ includes “making a water network available for the provision of water connection services”, clause 4.3 provides that the charge applies to each unit and common property in a unit title or community title development and clause 3.4 provides that water charges are payable pursuant to clause 3.4;
(h)the respondent is liable to pay the 2013 charges.
[42] Witness statement Jeremy Jackson Annexure JJ-10 at pages 70 - 73
158.In relation to the 2014 charges the Tribunal finds[43]:
[43] Witness statement Jeremy Jackson Annexure JJ-11 at pages 112 - 116
(a)the sewerage charges are payable pursuant to clause 1.6 ‘unconnected Charge’ of the 2014 schedule of charges;
(b)clause 2.6 provides that where a parcel of land is subdivided into unit title lots, each unit comprises a separate parcel of land to which sewerage supply charges apply;
(c)alternatively, on the basis that the definition of ‘sewerage services’ includes “making a sewerage network available for the provision of connection services” clause 2.8 provides that a “unit is a Class 5 parcel of land if the crown lease provides that the unit lot or community title is to be used for a purpose other than residential purposes” and clause 1.5 provides a charge for the supply of sewerage services to a Class 5 parcel of land;
(d)references to supply of water charges include ‘or availability of supply’ where water charges are available but not connected to a parcel of land including but not limited to a vacant parcel of land or carpark;
(e)water charges are payable pursuant to clause 3.6 ‘unconnected charge’ of the 2014 schedule of charges for each parcel of land;
(f)clause 4.3 provides that the charge “applies to each unit in a unit title development including when water services are available but not connected to a unit”;
(g)clause 4.5 provides that an unconnected charge applies to:
A parcel of land that is not connected to the water supply network, but where water supply infrastructure has been installed and is available to supply water to the land.
(h)alternatively, clause 3.4 provides that a supply charge applies to each unit title lot “(which is not common property) including when water services are available but not connected to a unit”;
(i)as submitted by the applicant[44], on the basis that definition of ‘water services’ includes “making a water network available for the provision of water connection services” water charges are also payable pursuant to clause 3.4; and
(j)the respondent is liable to pay the 2014 charges.
[44] Applicants submissions v 1.2 [66]
159.In relation to the 2015 charges the Tribunal finds:[45]
[45] Witness statement Jeremy Jackson Annexure JJ-12 pages 157 - 161
(a)sewerage charges ‘unconnected charge’ are payable pursuant to clause 1.6 of the 2015 schedule of charges;
(b)clause 2.6 provides that where a parcel of land is subdivided into unit title lots, each unit comprises a separate parcel of land to which sewerage supply charges apply;
(c)alternatively, on the basis that the definition of ‘sewerage services’ includes “making a sewerage network available for the provision of connection services” clause 2.8 provides that a non-residential unit title lot is “a Class 5 parcel of land if the Crown Lease provides that the unit lot is to be used for a purpose other than residential purposes” and clause 1.5 provides a charge for the supply of sewerage services to a class 5 parcel of land;
(d)the water charges are payable pursuant to clause 3.6 of the 2015 schedule of charges;
(e)clause 3 provides that references to supply include “or availability of supply” when water supply services are available but not connected to a parcel of land including but not limited to a vacant parcel of land or carpark”;
(f)clause 4.3 provides that the charge “applies to each unit in a unit title or community title development including when water services are available but not connected to a unit”;
(g)clause 4.5 provides that an ‘unconnected charge’ applies to “a parcel of land that is not connected to the water supply network, but where water supply infrastructure has been installed and is available to supply water to the land”;
(h)alternatively, clause 3.4 provides that a supply charge applies to each unit title lot “(which is not common property) including when water services are available but not connected to a unit”;
(i)as submitted by the applicant[46], on the basis that definition of ‘water services’ includes “making a water network available for the provision of water connection services” water charges are also payable pursuant to clause 3.4; and
(j)the respondent is liable to pay the 2015 charges.
[46] Applicants submissions v 1.2 [66]
160.In relation to the 2016 charges the Tribunal finds:[47]
(a)the units were originally classified as class 3 – unit title or community title applies:
Where a parcel of land is subdivided into units under unit titles legislation or is included in a community title scheme under community title legislation:
(a) each unit or community title lot (which is not common property) is a separate parcel of land in this class; and
(b) each common property is a separate parcel of land in this class.
(b)The 2016 schedule provides that the standard water charge is the “Standard Water Supply Charge – a supply charge to each parcel of land” and a ‘standard water consumption charge’. The ‘standard water supply charge’ for a class 3 unit title lot, included “for a parcel of land for which services are available but the parcel is not connected to the water network”;
(c)the standard sewerage charge applies to each parcel which is a unit title lot “where the parcel of land is connected to the sewerage network;”
(d)class 6, which applies to a parcel of land that is not connected to the sewerage network, but the sewerage supply infrastructure has been installed and is available to the land – the Standard Sewerage Charge applies.
(e)alternatively, the ICRC when approving the 2017 SCC and schedule of charges, approved the reclassification of the relevant parcels of land for the period 1 July 2016 to 30 June 2017 so that the units are classified as class 6 and unconnected water and sewerage charges apply.[48]
[47] Witness statement Jeremy Jackson Annexure JJ-13 pages 198 - 203
[48] A copy of the 2017 SCC and schedule of charges is annexure A to Steven Taleski’s witness statement (Exhibit A)
161.The Tribunal is satisfied and finds that when the ICRC reclassified the relevant parcels of land from class 3 to class 6 effective from 1 July 2016 this removed any doubt that the respondent’s units were considered as not connected to the networks and were liable to pay the unconnected water and sewerage charges.
162.The Tribunal is satisfied and finds that section 93 of the Utilities Act enabled the ICRC to approve a variation of the terms of a SCC. Subsection 93(3) provides:
If the terms of a standard customer contract for a utility service provided by a particular utility are varied under this part, each standard customer contract for the provision of the service by the utility is varied accordingly.
163.The respondent is liable to pay the 2016 water and sewerage charges.
Liability for payment of interest
164.The respondent’s liability for payment of the charges the subject of this application is found in section 94 of the Utilities Act. The respondent is the registered proprietor and, thus, the owner of each of the units where water and sewerage services are supplied under the SCC.
165.Clause 6.8 of the 2013 SCC and clause 6.10 of the 2014, 2015 and 2016 SCCs provide:
You must pay an account by the due date shown on the account. The due date will be at least 21 days after the date on which you receive the account unless you agree to a shorter period.
166.Clause 6.10 of the 2013 SCC and clause 6.12 of the 2014, 2015 and 2016 SCCs provide:
Any amount which remains unpaid after 14 days from the due date (or is paid by a method which is later dishonoured or rejected),is a debt to us and we may charge you interest from the original due date.
167.Schedule 2 of the SCC defines ‘interest’ as:
for a period means the amount calculated in accordance with the Supreme Court interest rate(s) for post-judgment interest applying for that period, as set from time to time by the Court Procedure Rules 2006.
168.The Tribunal is satisfied, for the above reasons, that the applicant is entitled to recover interest calculated in accordance with the Court Procedure Rules 2006. The applicant has calculated the interest at $1.16 per day from 29 April 2017 to 5 February 2018, being 283 days. The Tribunal finds that the applicant is entitled to interest from 6 February 2018 until the date of this decision, 27 July 2018, a further period of 172 days. The respondent is to pay interest at $1.16 per day for 455 days, of $527.80.
169.Pursuant to section 48 of the ACAT Act the Tribunal will order that the respondent pay the filing fee of $290.00 to the applicant.
Conclusion
170.The Tribunal will enter judgment for the applicant against the respondent for the amount claimed, $7,695.68, plus interest of $527.80 and the filing fee of $290.00, which totals $8,513.48.
………………………………..
Presidential Member E Symons
HEARING DETAILS
FILE NUMBER:
XD 629/2017
PARTIES, APPLICANT:
Icon Water Limited
PARTIES, RESPONDENT:
David Muir
THIRD PARTY
The Owners Units Plan No 328
COUNSEL APPEARING, APPLICANT
N/A
COUNSEL APPEARING, RESPONDENT
N/A
SOLICITORS FOR APPLICANT
NV Lawyers
SOLICITORS FOR RESPONDENT
N/A
TRIBUNAL MEMBERS:
Presidential Member E Symons
DATE OF HEARING:
5 February 2018
DATE OF FINAL SUBMISSIONS:
16 May 2018
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